FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationOpening and Maintaining Customer Accounts and Investment RecommendationsEasy
A client wishes to open a new individual brokerage account. Which of the following pieces of information is NOT typically required to be collected by the registered representative at the time of account opening, although it may be useful for suitability purposes?
- AClient's full legal name
- BClient's annual income
- CClient's Social Security Number (SSN)
- DClient's date of birth
Show answer & explanationAnswer & explanation
Correct answer: B. Client's annual income
While a client's annual income is crucial for making suitable investment recommendations, it is not a mandatory piece of information for simply opening an account under FINRA Rule 4512 (Customer Account Information) or the USA PATRIOT Act, which primarily focus on identity verification. Name, SSN, and DOB are essential for identity verification.
Why the other options are wrong
- A. Full legal name is required for identity verification and account registration.
- C. Social Security Number is required for tax reporting and identity verification.
- D. Date of birth is required for identity verification and to determine legal age for contracting.
New Account Required Information
FINRA and the USA PATRIOT Act mandate specific information for opening a customer account, primarily for identity verification and anti-money laundering purposes.
- Name, address, date of birth, Social Security Number (or Tax ID)
- Citizenship/nationality
- Employment information
- Not all suitability information is legally required to open the account, but it is required to make recommendations.
Memory trick: IDentify Me Swiftly and Clearly for Account Opening.