Suitability Rules
FINRA Rule 2111 (Suitability) requires broker-dealers to consider all of the following EXCEPT:
Suitability focuses on CUSTOMER factors. Three types: reasonable-basis, customer-specific, quantitative.
Complete Analysis & Legal Rationale
Suitability analysis focuses on customer factors: investment objectives, risk tolerance, financial situation, time horizon, liquidity needs, and tax status. While conflicts of interest (including compensation) must be disclosed under Reg BI, they are not part of the suitability analysis itself.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Primary source referenced in the explanation (FINRA Rule 2111). Verify current text before launch.
Official Standard: Primary source referenced in the explanation (Regulation Best Interest). Verify current text before launch.