What should a representative do when a proposed trade is unsuitable based on a client’s KYC information?

When a proposed trade is deemed unsuitable based on the client’s Know Your Client (KYC) information, the representative's responsibility is to ensure that the client's best interests are prioritized. By clearing the transaction with the Compliance Department or Branch Manager, the representative is taking a prudent approach to assess whether the trade can be justified or if further action is necessary.

This step provides a safeguard for both the representative and the firm. Compliance departments possess the expertise to evaluate the risks associated with the transaction and to ensure that all regulatory obligations are met. Consulting with a supervisor or compliance officer also helps establish a documented process in case any issues arise later, thus protecting the client’s interests and the firm’s reputation.

While it might seem tempting to simply advise the client to withdraw their request or to move forward despite the concerns, these options do not adequately address the relationship of trust and protection that is foundational in client interactions. Ignoring the concerns jeopardizes the client's financial well-being and can lead to significant issues down the line. Ultimately, involving the compliance team ensures that all regulatory and ethical considerations are met while prioritizing the client's financial health.