blanket recommendation

Blanket Recommendation

A situation in which a financial professional or institution sends a recommendation to all clients to buy or sell a particular security or product, regardless of whether or not the particular asset is compatible with the client's investment goals, objectives, and risk tolerance.

Notes:

Communicating to clients through a blanket recommendation is usually ill-advised, because the clients solicited will have varying investment profiles. Imagine if a particular client who is retired and can't afford to lose a lot of money is a recipient of a blanket recommendation, and the recommended transaction is of higher risk than what she is used to. Should the client follow the firm's advice, she stands to lose a portion of her savings that has taken a long time to accumulate and would be very difficult to replenish.

See also: Full Service Broker, Investment Advisor, Risk Lover, Risk Neutral, Risk Tolerance

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Blanket recommendation

A recommendation by a brokerage firm sent to all its customers advising that they buy or sell a particular stock regardless of investment objectives or portfolio size.

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blanket recommendation

A recommendation to buy or sell a security that is sent by a brokerage firm to all its customers. Firms do not consider individual investors' objectives before sending out a blanket recommendation.

Are blanket recommendations sent to investors in a timely enough manner to be effective?

Blanket recommendations for a specific security usually have been significantly diluted by the time the client receives a mailing from the brokerage firm. In most cases, the recommended security should be looked at as a long-term play rather than as a trading vehicle.

George Riles, First Vice President and Resident Manager, Merrill Lynch, Albany, GA