Just call us Bond. Amortized bond.
Over 700 finance terms, Shmooped to perfection.
If you're caught doing this, the security regulators are going to love making an example of you—trust us. The gist of the law is that you do what's best for your client...not what's best for you, your commission structure, or the Hawaii trip you win at the end of the year for who shafted the dumbest client. You work for them, not against them, etc.
Everyone's heard this one: an unscrupulous investment advisor recommends 90 year-old Grandma Madge sink her life savings into a 30-year long bond. Unsuitable? You bet. Like is she really gonna live 90 more years? Would you put her into venture capital? Uh...no.
A fund typically lasts a decade so that won't work either. Equities? Eh. Maybe very small, if it pays a fat dividend. So what is suitable for a 90-year-old grandma? Well, cash looks pretty good. You don't get big commissions selling people cash. But it's the suitable thing to do. Short term paper, low yields, low risk. Swap the polarity if the client is 9. More or less, anyway.