SIE practice questionmediumFiduciary Duty - Suitability
A registered representative is helping a client build a portfolio. What principle requires the rep to make only recommendations that are appropriate for the client’s finances and investment objectives?
- ABest execution
- BSuitability✓ Correct answer
- CInvestment discretion
- DArbitrage
Explanation
Why B — Suitability
Suitability rules mandate recommendations are in line with client needs. Best execution is about getting optimal trading terms. Investment discretion involves trade authority, and arbitrage is price difference exploitation.
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