Diligence and Reasonable Basis & suitability

When an analyst think that a major change in the tax law will benefit holders of utility company stocks. Then, the analyst calls all her client to tell them about the upside potential of investing in such assets now.

Is not htis a violation of Diligence and Reasonable Basis prior than being a violation of suitability?

It’s a violation of suitability. She may have done proper research prior to concluding that utility stocks will do well. However, not all clients may be suited for stocks. Some may have lower risk tolerance and benefit from fixed income investments instead of equities.

Make sense, thanks!