FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationOpening and Maintaining Customer Accounts and Investment RecommendationsMedium
Which of the following is NOT typically considered 'customer information' that a registered representative must gather when opening a new account?
- ACustomer's marital status and number of dependents.
- BCustomer's social media handles and online aliases.
- CCustomer's investment experience and risk tolerance.
- DCustomer's employment status and occupation.
Show answer & explanationAnswer & explanation
Correct answer: B. Customer's social media handles and online aliases.
While firms may monitor social media for compliance, a customer's social media handles and online aliases are not typically required 'customer information' to be gathered for opening a new account under FINRA's Know Your Customer (KYC) rules. Marital status, dependents, investment experience, risk tolerance, employment, and occupation are all relevant for suitability.
Why the other options are wrong
- A. Marital status and number of dependents are relevant for determining financial needs, tax implications, and overall financial situation for suitability.
- C. Investment experience and risk tolerance are crucial for assessing the suitability of investment recommendations.
- D. Employment status and occupation are essential for understanding income sources, potential conflicts of interest, and overall financial stability.
KYC - Non-Essential Info
Information that is not explicitly required by regulatory bodies like FINRA to be collected from a customer when opening a new account.
- Focus on financial, objective, and identity data.
- Personal preferences not directly related to finance are often non-essential.
- Avoid collecting unnecessary PII (Personally Identifiable Information).
Memory trick: Need for finance, not for followers.