A financial advisor who is also a broker-dealer must adhere to which standard?

The suitability standard is the correct answer because financial advisors who also act as broker-dealers are required to ensure that their recommendations are suitable for their clients based on the clients' specific financial situation, objectives, and risk tolerance. This means that when making investment recommendations, they must take into account the client's individual circumstances and provide products that are appropriate rather than solely the best option available in the market.

This standard emphasizes the need for the advisor to assess the client’s needs and investment goals and to suggest products that fit those criteria. While they have a responsibility to act in their clients' best interests, the suitability standard does not impose the same level of obligation as the fiduciary standard, which requires absolute loyalty and care.

In contrast, the fiduciary standard is typically more stringent and applies to financial advisors who manage funds on behalf of clients or who have a fiduciary duty. While disclosure standards pertain to informing clients about the risks involved with investments or any potential conflicts of interest, they do not directly dictate the decision-making process regarding what products or services to recommend. Reliability standards are not commonly discussed in the regulatory framework for financial advisors and broker-dealers.