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In our latest Research Assistant Peer Call, we focused on due diligence policies for new clients. It’s challenging to secure new clients, and even more so to ensure they’re reputable, especially when a criminal could be posing as a legitimate business. 

Starting Points for Due Diligence: 

• Google Searches: Include Secretary of State websites to verify business information. Check if the business is listed, in good standing, and identify the registered agent. 

• Business History: Research the company’s longevity and past activities. Simple online searches can reveal important details about the business, its owners, and any complaints or lawsuits. 

Advanced Due Diligence Tools: 

• Vendors and Software: Utilize tools that provide alerts on current clients with new lawsuits, helping you stay informed about their legal status.  

• RMAI Governance Document: Refer to this resource for comprehensive guidelines on due diligence. You can find this document here.  

Risk Management Policies: 

• One-Off Accounts: Avoid accepting one-off accounts from unfamiliar companies unless a thorough risk assessment is completed. This policy helps mitigate potential risks. 

• Site Visits: Hire third-party companies to conduct site visits and verify the legitimacy of the business premises, including photographing and inspecting the location. A peer suggested using a vendor to ensure clients have a physical office.  

Implementation and Consistency: 

• Documented Policies and Procedures: Establish clear policies and follow them rigorously. Consistent adherence to these guidelines will significantly reduce your risk level, enhance your reputation, and protect your bottom line 

Ensuring the legitimacy of potential clients is crucial to mitigating reputational and financial risks. Simple steps to verify a business’s standing and history and utilizing advanced tools and vendors for alerts and/or site visits can further safeguard against fraudulent entities.

Top Reads: 

• Supreme Court Overrules Chevron Doctrine in Landmark Administrative Law Decision 

Upcoming Webinars/ Other Announcements: 

• Have topics you want to discuss during the peer call? Please send them to: Sara_Consultant@roundtables.us and/or Missy Meggison, mmeggison@roundtables.us by Thursday to ensure it makes it on our agenda!