Investment Suitability

This walks you through FINRA Rules 2111 and 2090 to help you assess whether an investment recommendation passes muster. It covers all three suitability prongs (reasonable-basis, customer-specific, and quantitative), with specific guidance on complex products like leveraged ETFs and variable annuities, plus the metrics that matter for churning concerns (turnover ratios above 6, cost-to-equity above 20%). Use it when designing recommendation engines, reviewing account activity for red flags, or figuring out whether a hold recommendation needs documentation. The household vs account-level distinction is spelled out clearly, which matters more than you'd think when customers have assets scattered across platforms.

skills.sh installs: 714
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last updated: Aug 21, 2026

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Install

$ npx -y skills add joellewis/finance_skills --skill investment-suitability --agent claude-code

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Investment Suitability

Regulatory status current as of June 2026 — verify effective dates, dollar thresholds, and pending rulemakings against current SEC/FINRA/FinCEN sources before advising.

Core Concepts

FINRA Rule 2111 — Suitability

The foundational rule requiring that a broker-dealer or associated person have a reasonable basis for believing a recommendation is suitable for the customer. Applies to recommendations of securities and investment strategies involving securities, including recommendations to hold. Three distinct obligations arise from Rule 2111:

Three Suitability Obligations

1. Reasonable-Basis Suitability (Rule 2111.05(a)) The firm or associated person must perform reasonable diligence to understand the nature of the recommended security or strategy, including its risks, rewards, and features. This is a product-level obligation — the representative must understand what they are recommending before recommending it to anyone. A representative who does not understand a complex product cannot satisfy reasonable-basis suitability regardless of how well it might fit a particular customer.

SKILL.md on GitHub