Best Interest vs. Suitability

It’s important on all the exams to know something about Best Interest and Suitability. A recent disciplinary action by FINRA sanctioned and fined an RR for failing to provide a customer with Best Interest. How did that happen? The RR recommended a purchase that was in fact deemed suitable. The customer had two accounts: one fee-based and one commission-based. The RR placed the purchase in the customer’s commission account and then less than a week later sold it. While the purchase was suitable, it was in the customer’s Best Interest to have placed both trades in the fee-based account, thus avoiding commissions.