BondDesk Group is now offering a new suitability module for BondWorks Wealth Management Platform – to meet new customer suitability rules for investment advice.

The new BondWorks Suitability Module lets financial advisors comply with the updated FINRA (Financial Industry Regulatory Authority) Rule 2111. It runs suitability tests on investment ideas before a recommendation is made to customers.

It can issue an alert if a transaction is not suitable for someone’s investment profile, and thereby prevent violations early in the process, according to a company statement.

Without such pre-trade suitability tests, relationships with investors can be hurt and there is a possibility of trade cancellations which are costly and can lead to substantial fines.

"Most suitability software systems today operate post-trade, thereby missing the requirement that recommendations, not only transactions, be suitable," Kamaryn Tanner, managing director at BondDesk Group, said in a recent press release. "Our clients are thrilled with this new module because it helps keep costs down while at the same time provides the financial advisors with a tool that helps them build trusting relationships with their customers."

The FINRA Rule 2111 says a firm or advisor must "have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer's investment profile." The rule went into effect this week.

"The strengthened suitability rule from FINRA is extremely important, as it serves to further protect end investors and the advisors and firms that serve them," Will Rhode, director of Fixed Income Research at Tabb Group, added in the press release. "With all these new regulations, it's important that vendors are proactive in helping firms navigate this increasingly complex environment to better serve their customers and ensure they remain in compliance."

BondDesk is a financial technology company, which provides fixed income technology and operates an odd-lot fixed income alternative trading system (ATS). It provides solutions to over 2,000 investment firms.

Last August, BondDesk named Kim Bang its new chief executive officer. Bang was a founding member, CEO and president of Bloomberg (News - Alert) Tradebook. In addition, Bang was COO of the EMEA (Europe, the Middle East and Africa) and the Asia-Pacific regions for Bloomberg Enterprise Products and Solutions.

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