Pitfalls of High Net-Worth Advisors

Building and guarding client assets is more than a full-time job for family offices, agents, consultants, and other financial advisers. It is key for them when advising clients to avoid these pitfalls:

Allowing clients to invest in projects without proper due diligence:Film, restaurants, product development, and other ventures are a sample of opportunities that become available to clients with high net-worths, such as athletes. The reality is that a slim slice of these opportunities will actually become profitable. The athlete may become used to the adrenaline rush of being on the field, and getting involved in these projects can mimic that feeling, so it is incumbent upon advisors to seek proper due diligence of attorneys to vet potential projects. An attorney can provided coolheaded advice, informing the client of all risks involved.

Becoming entangled with unscrupulous partners. Sometimes well meaning, and often without pure intent, associates and others on the fringe of the network, and sometimes within, can ingratiate themselves into the network, obtaining commitments from your clients with certain rights and responsibilities that come along with them. Always monitor these relationships and and have contracts vetted by an attorney.

Failure to Screen for Conflict of Interest: Attorneys are bound by the strictest conflict of interest professional responsibility rules, but others in the network often are not. You have to dig deeper into these relationships before moving forward with trust.

Fogel & Potamianos LLP‘s General Counsel Group serves as outsourced general counsel to small and middle market companies, as well as high net worth individuals with multiple business interests.

This blog is provided for general informational purposes only and no attorney-client relationship with Fogel & Potamianos LLP is created. By using the blog, you agree that the information on this blog does not constitute legal or other professional advice. The blog is not a substitute for obtaining legal advice regarding a potential matter from a qualified attorney licensed in your state.

4100 W. Alameda Ave.
Suite 300
tel: 866-268-2787

9442 Capital of TX Hwy N,
Plaza 1, Suite 500
AUSTIN, TX 78759
tel: 866-268-2787

© 2020 by Fogel & Potamianos LLP