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I work for a brokerage firm; our reps get questions about this all the time.
It has always been the responsibility of a financial advisor to collect comprehensive information about a client's financial status; this is part of the advisor's "due diligence" in making recommendations suitable to that particular client. By industry regulation, most stock brokers are also classed as financial advisors.
In the early 80s, good business practices were codified by regulation and law in response to money laundering concerns. By defining what information had to be collected and maintained, federal investigators were better able to track down illegal activities such as smuggling and racketeering. New regulations and laws also put the onus on the bank or investment firm to watch for "red flag" activities that might signal such illegal activities and to report them to the appropriate federal authorities once enough flags started waving.
As part of the Patriot Act, the definition of "red flag" as given in existing regulation and law was expanded to include activities that might indicate funnelling money to "terrorist or suspected terrorist" organizations. It also moved some previously "get if you can" information into the "you must obtain and maintain" category, broadened the class of people from whom such information was required, expanded the group of people who were subject to penalties for violations and increased the punishments that would be handed down on conviction of such illegal activities. Again, this was not the creation of new laws, but the extension of laws that have existed for two decades previously which themselves were the codification of good business practices that have been around for at least 50 years before that. The laws from the 1980s have been tried in courts and consistently upheld as Constitutional.
Now, the Patriot Act expansions do have problems in that the new parts are very vague and Constitutional protections have been stripped down to the bare minimum. Even so, the number of people who have been caught up in these changes has been (from what I've been hearing via the industry grapevine) is vanishly small, and almost always as part of a broader investigation for terrorist activities. In other words, (so far) it has only been used to add a legitimate legal charge along with questionable legal charges.
Without the Patriot Act expansions, the vast majority of would-be investors would still have to provide the requested information, so you don't need to get excited. If investors are answering added questions, it almost certainly the result of the investment firm looking at the vagueness of the laws as they now stand and figuring "Better to annoy clients than take the chance that DHS will come knocking." Again, the laws and regulations as they existed before the Patriot Act have all passed Constitutional muster, and very few are directly affected by the Patriot Act expansions.
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