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Finance Dictionary and Glossary of Investment Terms
Know your customer
Definition 1.
An ethical guideline stating that brokers must know basic information about a customer before opening an account for him, in order to know which investments would be appropriate for the customer.
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Definition 2.
An ethical foundation of securities brokers that an adviser who recommends the purchase or sale of any security to a customer, must believe that the recommendation is suitable for the customer, given the customer's financial situation.
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Definition 3.
A guideline stated or implied by various securities regulatory bodies which requires that brokers determine the suitability of investments for customers before making recommendations. also called Rule 405 or Suitability Rules.
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