Most of us know to be cautious when someone giving us advice has something to gain. But conflicts of interest aren't always obvious. And they don't necessarily mean someone is being dishonest. Sometimes the person giving you advice genuinely believes it is the right advice. That's what makes the conflict harder to see.
On a June 2026 investor webcast, well-known fund manager Ron Baron was talking about his firm's investment in SpaceX. He told investors, “We're not selling and we're not letting other people sell either.”
Baron clearly believes in the investment. His statement was meant to communicate that conviction. But it also gives investors useful information about his position. Baron's interests and his investors' interests may be closely aligned today. But there could be a point when they aren't. If an investor decides it is time to sell, while the fund manager believes maintaining the investment and his relationship with the company is more important, whose interests come first?
That's the question worth asking. Not because Baron is necessarily wrong, but because good risk management requires understanding the incentives behind the advice you receive.
You don't have to distrust everyone who gives you advice. You just need to understand where they're coming from. When someone is helping you make an important decision, ask five questions:
Go back to the investor call. Baron has a strong belief in SpaceX and an important relationship with the company. His firm also benefits when investors remain invested. None of that means his assessment of SpaceX is wrong. It means investors should understand that his recommendation to hold the investment comes from someone who has reasons of his own to want them to hold it. That distinction matters.
It is also important to be precise about what Baron was describing. Investors can sell ordinary Baron mutual funds without a penalty. The restrictions and punitive exit terms discussed on the call apply to the dedicated partnership built around the SpaceX investment. Baron isn't hiding his conviction or the structure. In fact, his openness makes this a useful example of why investors should understand the interests surrounding any recommendation.
You don't have to be an investor to encounter this problem. A vendor offers a free assessment and recommends a product that it happens to sell. A consultant recommends a larger project that will require more consulting hours. An advisor recommends one option over another and earns more if you choose it. None of these people has to be dishonest. They may genuinely believe their recommendation is best for you.
But sincerity doesn't eliminate a conflict of interest.
That's why the goal isn't to decide whether you trust the person. It's to understand the incentives surrounding the advice.
There is value in getting advice from someone who does not financially benefit from which option you choose. It removes one variable from the decision. An independent advisor can still be wrong. But when that advisor does not have a product to sell or a financial stake in your choice, there is less reason for their business interests to influence the recommendation.
That is the structure RiskVersity tries to create in its advisory and Fractional CRO work: identify the risk, explain the options and help the client make the decision without profiting from which option they choose. And clients should hold us to that standard, too.
The next time someone gives you advice about an important decision, ask yourself:
What would this person lose if I did the exact opposite of what they're recommending?
It means you have identified a conflict worth considering. And that's when a second opinion can be especially valuable. RiskVersity's independent advisory and Fractional CRO services help organizations evaluate important risk decisions without selling a product or solution tied to the recommendation.
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