Every investment broker in the United States is obligated to collect the following information from their clients:
- Full Legal Name
- Social Security Number
- Date of Birth
- Citizenship/Residency status
- Employment status
One of the reasons we need this information is for tax purposes. Since you need to report your capital gains, losses and dividends to the IRS, your broker must have your information in order to send you the required forms you'll need to file each year.
According to the Securities and Exchange Commission (SEC), there are three other reasons why brokers are legally required to ask for your personal information: suitability, record-keeping requirements, and anti-terrorist/anti-money laundering laws.
The last two are self-explanatory, but what is suitability? During the signup questionnaire, we ask every user additional questions including their current investment assets, risk tolerance, investment time horizon, and so on. In addition to allowing us to act in your best interest as a fiduciary, this information helps us determine a few things. First, if you should even be investing in the stock market, and if so, which kind of stocks we should use to build your portfolio.
At the end of the day, it's in your best interest to provide us with this information. After all, we can't tailor-make portfolios for you if we don't know your measurements.
Rest assured, we keep all of this information secure. You can read more about that here.