Optional customer information

Firms must collect certain information when you open an account. Other information may be requested but is provided voluntarily. In particular, suitability questions are always optional for a customer to answer.

Suitability questions include:

Investment objective

Risk tolerance

Investment experience

Investment goals

Marital status

Annual income

Net worth

Tax status

Liquidity needs

General financial situation

Some of these items (such as annual income and net worth) can feel sensitive. Firms ask for them because they need enough detail to understand your overall financial situation before making recommendations. A firm should only recommend an investment when it believes it has a complete picture of the customer’s circumstances. If a customer chooses not to answer suitability questions, the firm won’t be able to recommend or suggest specific investments. In that case, any trades in the account must be unsolicited, meaning the customer initiates them without the firm’s guidance.

Key points

Suitability questions

Not required to be answered

Firms cannot make recommendations without this information