Appropriateness and Suitability assessments are key regulatory investor protection measures. Where a firm will conduct a Suitability or an Appropriateness assessment depends on the services being offered.
Firms that do not provide investment advice, like IBKR, are required to conduct an Appropriateness Assessment on certain products. The Appropriateness Assessment is based on the client’s knowledge and experience relevant to the specific type of financial instrument, investment product or service requested by the client.
When providing investment advice or portfolio management, a financial institution must conduct a Suitability Assessment to ensure that investment advice and decisions to trade (including to buy or to hold) are suitable for the investor in accordance with their risk tolerance and ability to bear losses. Therefore, in addition to client’s knowledge and experience information, such firms must request detailed information about client’s financial situation, their ability to bear losses and their investment objectives including their risk tolerance. Interactive Brokers does not provide personal investment recommendations, advice or portfolio management services, so we do not (and are not required to) conduct a Suitability Assessment.
Please Note
- We ask general information around your investment objectives, financial situation, risk, and loss tolerance to apply other regulatory or internal policy requirements. This information is not used for the regulatory Appropriateness Assessment.
Additional Information