Sarasota County Bar Association
Manatee Chamber of Comerce

Unsuitable Investing

You may hear about something being deemed an unsuitable investment. This means that a broker recommends an investment without regard to the customer’s needs, objectives , or risk tolerance.

Brokers are duty bound to have a certain level of knowledge about their customer’s finances. They should be recommending investment strategies based on that knowledge.

Unsuitability does not refer to a singular investment. All investment carries some risk. It’s more a case of promoting the wrong TYPE of investment, based on the customer’s profile.

Did your broker take big risks with your money? Your Broker may have made unsuitable investments, and the team at Gucciardo Law can help you find out if you have a case.

Unsuitable Investments Explained

A broker must make investment recommendations that are consistent with your needs, objectives, and risk tolerance. It is your broker’s obligation to know what is suitable for you, and if they failed in this duty you may have a claim.

What’s the Rule?

FINRA Rule 2111 addresses this issue – it’s known as the suitability rule, which essentially says that your broker must have a reasonable basis to think that an investment is suitable for you.

Your Broker Has the Duty – Even if You Agreed to the Investment, You May be Entitled to a Claim It’s your broker’s responsibility to collect as much information as possible before recommending investments and a strategy.

A broker that acts recklessly with your money may be guilty of fraud and subject to arbitration.

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