A recommendation is unsuitable for a client's investment objectives and risk tolerance. Which Standard is violated?

• A. Standard IV.C Suitability
• B. Standard V.A Diligence and Reasonable Basis
• C. Standard VI.A Disclosure of Conflicts
• D. Standard I.C Misrepresentation

Answer: (A)

Suitability is the key idea here. Investment recommendations must align with a client’s objectives, risk tolerance, time horizon, and financial constraints. When a recommendation is unsuitable for what the client can tolerate or aims to achieve, it violates the requirement to propose appropriate, tailored advice. This standard exists to protect clients by ensuring that every suggestion fits their unique situation, not just that it’s a potentially profitable idea. If the advisor also lacks a solid, reasonable basis for the advice, that would implicate another standard, but the core issue in this scenario is failing the suitability obligation.