Trust But Verify: Vetting Advisors

Welcome to the August 2025 edition of our newsletter!  In this issue, we’ll examine the importance of vetting various advisors, whether for legal matters or financial advice.

Guidance Through Stormy Waters: The Role of Advisers

As business transactions and financial markets develop increased complexity – private assets in 401(k) accounts, ever shifting regulatory landscapes – your clients’ need for sound advice has rarely been more paramount.  But how can they be sure they’ve found someone whose counsel they can trust?

Whether lawyers seeking to be consulted on an investment opportunity or financial advisors promising above average returns to a family office, expertise can be of immense value.  Making sure the professionals involved can deliver on their promises requires thorough due diligence, looking into their backgrounds with great detail.  Did they pass the bar, as they have claimed?  Do they have all of the degrees listed on their curriculum vitae?  Some of this verification would involve direct contact, such as with a university registrar, while other items can be verified by consulting directories like state bar records or other licensing bodies.  Verification of employment can involve needing a party’s consent, but many high-level positions can be verified by analyzing news articles, company statements, or litigation.   Financial advisors are also heavily regulated, and much detail about their pasts can be found in records from FINRA, the National Futures Association, and other self-regulatory groups.

Fraud in the advisor space is nothing new, and evolving with the times.  Parties can embellish their past experience and education, or simply lie altogether; other times, a person’s entire identity is a carefully curated fiction meant to gain trust and deceive others, and in other instances – such as the Bernie Madoff scheme – a fraudulent advisor preys on the trust placed among members of a common group, such as religious or civic organizations.

Traditional due diligence efforts offer redundancies which can detect fraud in a timely manner, whether an exaggeration or lies. Whether making a key hire or looking to close a deal, thorough review of a potential advisor’s background is an essential tool to operating in our increasingly interconnected world.