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- Inappropriateness, unsuitableness, unsuitability, ineptness.
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Apr 27, 2022 · Let’s discuss a few of the standards insurance producers are held to, and what these standards mean for their clients. 1. Suitability. The vast majority of insurance agents are held to the suitability standard. This means agents are expected to only recommend the products that are suitable to their client’s objectives, budget, and timeline.
- Overview
- Fiduciary Standards
- Suitability
Investment advisers and investment brokers, who work for broker-dealers, both tailor their investment advice to individuals and institutional clients. However, they are not governed by the same standards. Investment advisers work directly for clients and must place clients' interests ahead of their own, according to the Investment Advisers Act of 1940.
Brokers, however, serve the broker-dealers they work for and must only believe that recommendations are suitable for clients. This suitability standard is set by the
Financial Industry Regulatory Authority (FINRA)
Investment advisers are bound by a fiduciary standard that places their clients' interests ahead of their own.
Brokers work for broker-dealers, whose interests they serve. They follow a suitability standard, which means only that transactions must be suitable for clients' needs.
Broker-dealers can sometimes find themselves in conflict with their clients, who feel that selling one of their own instruments or adding unnecessary transaction charges breaks the standard and isn't in the best interest of the client.
Investment advisers are bound to a fiduciary standard that is regulated by the
Securities and Exchange Commission (SEC)
or state securities regulators, both of which hold advisers to a fiduciary standard that requires them to put their client's interests above their own.
The act is pretty specific in defining what a fiduciary means, and it stipulates that advisers must place their interests below that of their clients. It consists of a duty of loyalty and care. For example, advisers cannot buy securities for their accounts prior to buying them for clients and are prohibited from making trades that may result in higher commissions for themselves or their investment firms.
Broker-dealers have to fulfill what is called a "suitability obligation," which is loosely defined as making recommendations that suit the best interests of their client. Some broker-dealers feel this is unfair as it may affect their ability to sell investment vehicles that benefit their bottom line, but all a suitability obligation means is that the broker-dealer needs to believe that the decisions they make truly benefit their client.
Suitability also includes making sure transaction costs are not excessive—referred to as "churning" an account or racking up unnecessary trading fees—and that all recommendations benefit the client.
Synonyms for SUITABILITY: appropriateness, applicability, relevance, validity, usefulness, fitness, relevancy, aptness; Antonyms of SUITABILITY: unsuitability, unfitness, inappropriateness, impropriety, wrongness, incompatibility, incongruity, infelicity.
219 opposites of suitability- words and phrases with opposite meaning. Lists. synonyms. antonyms. definitions. sentences. thesaurus. words. phrases. Parts of speech. nouns. Tags. correctness. inappropriateness. mistake. suggest new. unsuitability. n. unsuitableness. n. impropriety. n. #mistake, taste. inappropriateness. n. ineptness. n.
Antonyms. unsoundness. weakness. flaws. lies. falsity. inaccuracy. ineffectiveness. EXPEDIENCY. Synonyms. expediency. expedience.
Jun 5, 2019 · Life and annuity suitability requirements are certainly not new to the insurance and financial services industry. Regulatory regimes applicable to variable annuities and the separate accounts through which they are issued have been around since the U.S. Securities and Exchange Commission (SEC) enacted the Securities Act of 1933, the Securities ...
Aug 12, 2022 · Suitable (Suitability): A situation (and sometimes a legal requirement) that an investment strategy meets the objectives and means of an investor. In most parts of the world financial ...