Suitability Definition

A suitability analysis is an assessment of whether a financial product or course of action is appropriate for a potential investor, based on that investor’s investment objectives, risk tolerance, and financial situation.

Many factors must be considered in order to make a determination of suitability, including but not limited to the following:

– The investor’s age

– The investor’s investment goals

– The investor’s current income and expenses

– The investor’s job security

– The investor’s other sources of income

– The investor’s debt obligations

– The investor’s dependents

– The investor’s liquidity needs

– The investor’s tax bracket

– The investor’s ability to tolerate risk

– The length of time the investment will be held

Ultimately, the decision of whether or not an investment is suitable for an individual investors comes down to that individual and their unique circumstances.