Why is suitability important?

You and your dealing representative should start by having a comprehensive discussion about your personal circumstances, including your investment needs and objectives, financial situation, investment knowledge, experience, and risk tolerance. Your dealing representative can then offer you potential suitable investments, and explain how a proposed investment is suitable for you in light of the information you have provided.

Source: http://www.albertasecurities.com/Regulatory%20Instruments/5380701-v1-ASC_Notice_31-701.PDF

EMDs must follow the same "Know Your Client" and "Know Your Product" procedures and carry the same "Suitability" obligations as other registered dealers (e.g. investment dealers, mutual fund dealers and scholarship plan dealers). These requirements ensure that each client's personal, financial and investment profile is understood and confirmed prior to any trading activity. EMDs must also ensure that any security they recommend is suitable for a particular client by considering the particular investment product as well as each individual client's investment goals and profile.

Source: https://www.pcmacanada.com/page/Thecapitalmarkets?

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