FINRA's suitability obligation requires a broker-dealer or registered representative to have a reasonable basis to believe a recommendation is suitable for a customer based on the client'investment profile. It includes reasonable-basis suitability (understanding the product),customer-specific suitability (matching the product to the client's situation), and quantitative suitability (avoiding excessive transactions). Although Regulation Best Interest now applies to retail recommendations, suitability analysis remains foundational-especially for variable annuities and other securities-based insurance products. Advisors must document objectives, financial status,risk tolerance, liquidity needs, and tax considerations, then align the recommendation with those factors.

Advisors document objectives, risk tolerance, liquidity needs, and taxes before recommending variable insurance. Files explain why the product fits and avoid excessive trading or serial exchanges. Even with Reg BI, suitability records remain core evidence that the recommendation matched the customer's profile.