An investment that is suitable for some investors might not be right for you and your investing needs. For example, some products such as high-risk, long-term investments that may be appropriate for young investors are often unsuitable for senior citizens due to limited access to invested funds. Accordingly, brokers have a responsibility to recommend only those investments that they believe are suitable for their customers’ financial situations.
Unfortunately, when some brokers stand to earn high commissions on a certain investment product, they may not adhere to the suitability standards—with potentially dire consequences for the investor. To prevent this from happening to you, remember to make sure your investments are appropriate for your investing needs and risk tolerance.