Mr. Henderson, retired with a modest pension, informs his advisor that he needs to maximize current income from his investments, minimize risk, and dislikes market fluctuations. If the advisor recommends a long-term growth equity fund with high volatility, what responsibility has the advisor failed?

Question: Mr. Henderson, retired with a modest pension, informs his advisor that he needs to maximize current income from his investments, minimize risk, and dislikes market fluctuations. If the advisor recommends a long-term growth equity fund with high volatility, what responsibility has the advisor failed?

Answer options:

• The Know Your Product (KYP) rule. ✅ The Suitability Requirement.
• The requirement to deliver Fund Facts.
• The obligation to update KYC information.

Correct answer: The Suitability Requirement.

Explanation: The advisor has failed the suitability requirement, as the recommended fund does not align with Mr. Henderson's investment objectives, risk tolerance, and time horizon, which is a core duty under CIRO MFD Rules (e.g., Rule 3105).