In many cases, a municipal securities dealer may recommend to you a particular investment or course of investments. In making a recommendation, the dealer must have reasonable grounds for believing that the recommendation is suitable. The dealer must make this "suitability determination" based on the information available about you and about the security you are purchasing. The same is true if the dealer has recommended that you sell a security you own. You should note that a dealer is obligated to make a suitability determination only if it has made a recommendation. Thus, if you have already made a determination on your own regarding a particular investment, the dealer generally will not be obligated to make a suitability determination.
Think About Reasons for Investing
Consider when you will need the money you are investing, how much you are depending on receiving interest on the bond over time (or upon your investment growing in value, in the case of 529 college savings plans), and the extent to which your objectives may be affected if your investment loses money or if your earnings are lower than expected. Make sure you know enough about your investment to understand whether it is likely to deliver the investment results you are seeking. You should work with your dealer to ensure that your investment is suitable - and if you are making an investment decision on your own without the guidance of a dealer, you need to be doubly sure that you make your own "suitability determination".