A new FINRA rule on suitability of recommendations by brokerages and brokers to customers—and to prospective customers—is set to take effect on July 9, and with it come a number of issues of which firms and advisors alike will want to be aware.

Brian Rubin, partner, SutherlandBrian Rubin (left), partner at the law firm Sutherland, said in an interview that one issue is that of the “potential” investor. “In the past when we’ve dealt with suitability,” said Rubin, “it has always been addressing actual customers or clients.” This time, however, guidance that he said many characterize as “bizarre” was issued in May that “talks about potential investors, even if that person doesn’t have an account at the firm.”

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