| || InvestHub.com's |
Finance Dictionary and Glossary of Investment Terms
Know your customer
An ethical guideline stating that brokers must know basic information about a customer before opening an account for him, in order to know which investments would be appropriate for the customer.
An ethical foundation of securities brokers that an adviser who recommends the purchase or sale of any security to a customer, must believe that the recommendation is suitable for the customer, given the customer's financial situation.
A guideline stated or implied by various securities regulatory bodies which requires that brokers determine the suitability of investments for customers before making recommendations. also called Rule 405 or Suitability Rules.