What does the suitability rule require firms to do before acting?

The suitability rule is designed to ensure that financial firms act in the best interest of their clients when making recommendations regarding investment products or services. To comply with this rule, firms must perform a thorough fact-find, which involves gathering detailed information about the client's financial situation, objectives, risk tolerance, and investment experience. This process allows the firm to understand the client's unique circumstances and to make appropriate investment recommendations that align with their needs.

By conducting a fact-find, firms can determine what products or services are suitable for each individual client. This is a crucial step to ensure that the advice given is personalized and relevant to the specific client's goals and risk profile, thereby mitigating the potential for mis-selling or unsuitable recommendations.

The other options, while they may represent important practices in a broader context, do not directly address the fundamental requirement of gathering client-specific information to ensure suitability in financial recommendations.