Yes, stockbrokers and brokerage firms in the U.S. have an affirmative obligation to gather information such as the new customer’s employment status, annual income, source of income, time horizon, liquidity needs, net worth, liquid net worth, tax bracket, and most importantly, risk tolerance and investment objective¹. This is required by SEC Rule 17a-3 (17)⁴. Is there anything else you would like to know?
Source: Conversation with Bing, 6/10/2023
(1) Stockbrokers and Brokerage Firms Can Be Held Liable for Negligence.
https://www.jpfirm.com/news-resourc...rage-firms-can-be-held-liable-for-negligence/.
(2) Broker-Dealers: Why They Ask for Personal Information.
https://www.investor.gov/introducti...ker-dealers-why-they-ask-personal-information.
(3) "Accredited Investor" Net Worth Standard - SEC.gov.
https://www.sec.gov/info/smallbus/secg/accredited-investor-net-worth-standard-secg.
(4) Why Do Brokers Ask for Personal Information? - Investopedia.
https://www.investopedia.com/ask/answers/06/personalinfoandbrokers.asp.
