What key factor must a Dealer Representative evaluate when assessing a client's eligibility for an investment?

The key factor that a Dealer Representative must evaluate when assessing a client's eligibility for an investment is the client's income and financial situation. This assessment is crucial because it helps determine whether the client has the necessary financial resources to make an investment and whether that investment aligns with their current financial status and long-term goals.

Income and financial situation provide insight into the client’s ability to handle investments, take on risks, and withstand potential losses. It includes evaluating factors such as disposable income, assets, liabilities, and overall financial health. This analysis helps ensure that any investment recommendations made are suitable and align with the client’s capacity for investment, thus prioritizing the client’s financial well-being and regulatory requirements.

While aspects such as prior investment history, risk tolerance, and personal preferences are important considerations in the investment process, they do not take precedence over understanding a client’s income and financial circumstances. Without evaluating financial capability first, it would be difficult to establish a sound and responsible investment strategy.