Suitability: Does the Concept Apply to Online Brokerage?

Abstract

This article provides a comprehensive look at suitability rules, first in the traditional brokerage context and then in terms of their application to online brokerages in general. It outlines the arguments made by the online brokerages to differentiate their world from traditional broker‐dealers, and offers hypothetical scenarios in which suitability concepts may apply in the online brokerage setting. The authors suggest that online brokerages should be allowed time to determine the appropriate rules in light of how the technology itself evolves over the next several years.

Citation

SCHNEIDER, H., BUTOWSKY, M.R. and LEW, M.M. (2000), "Suitability: Does the Concept Apply to Online Brokerage?", Journal of Investment Compliance, Vol. 1 No. 1, pp. 60-71. https://doi.org/10.1108/eb045872