Suitability is the FINRA standard that requires a broker to have a reasonable basis to believe a recommendation fits the customer, based on that customer's investment profile.
FINRA Rule 2111 has three parts. Reasonable-basis: the recommendation must be suitable for at least some investors. Customer-specific: it must suit this customer's profile, including age, other investments, financial situation and needs, tax status, objectives, experience, time horizon, liquidity needs and risk tolerance. Quantitative: a broker who controls an account must not trade it excessively.
Since June 30, 2020, recommendations to retail customers have been covered by the SEC's Regulation Best Interest instead, and Rule 2111 doesn't apply to them. Suitability still governs recommendations Reg BI doesn't reach, such as those to businesses and institutions.
Suitability asks whether a recommendation fits you. Reg BI adds that the broker can't put its own interests ahead of yours and must address its conflicts. An investment adviser's fiduciary duty goes further, covering the whole relationship.
How to check
On FINRA BrokerCheck, complaints are often described as unsuitable recommendations. A pattern of them on one broker's record is a serious warning sign.
Sources
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