A Guide To Answer That Age-Old Question: So What Does It Mean To Know Your Customer?

May 2012E-Books

Table of Contents

  • Introduction
  • What Personal Information Should Be Gathered by the Broker-Dealer/Investment Adviser?
  • What Additional Information Should the Broker-Dealer/Investment Adviser Collect?
  • Conclusion
  • About the Author


So now that you have secured a client relationship, the age-old question that every financial adviser faces is: “Do I adequately know my customer?”

The answer to this question necessarily serves as the underlying basis regarding the suitability of any investment recommendation and should be obtained on the front-end of the client/adviser relationship, as opposed to being debated during the trial involving a customer-initiated complaint. Notwithstanding the importance of knowing your customer, all too often this information gathering process is not given its proper weight.

The following provides guidance pertaining to the information that should be gathered from every new client and maintained over the life of the client/adviser relationship. In addition, this guide contains suggestions on how you can improve your client account forms to ensure adequate “know your customer” information is gathered and maintained. Conducting adequate fact gathering will protect you from potential liability, ensure that you make suitable investment recommendations and preserve good client relations.

View entire publication.