The Unsuitability of Securities

National Association of Securities Dealers (NASD), some other regulatory bodies and the Securities and Exchange Commission (SEC) require brokers to offer suitable advice when they are dealing with clients. Brokers must learn about the tolerance for risk and the investor’s financial condition to determine what strategy would best serve a client’s portfolio. Investors who suffer a loss of value of securities due to unsuitable advice may be able to file legal claims which are against the broker who has provided it.