Advisors share financial and investment knowledge with clients who seek guidance. And their know-how can be useful in other ways, including in court as an expert witness.
It's not as much of a stretch as you might think. To reach a wider audience, many advisors already lead public seminars on retirement or college savings planning. Or they write articles on aspects of financial planning, from asset allocation to household budgeting. Others lead professional development courses or coach planners to take industry exams.
So it's only natural some serve as arbitrators or expert witnesses in legal proceedings. In complex financial cases, attorneys may benefit from the depth of knowledge that advisors offer.
Harris Holzberg, 66, began teaching a Series 7 prep course to stockbrokers and supervisors in the early 1980s. His success teaching how to prepare for securities licensing exams led to banks and savings and loans hiring him to train their new employees. From there, he participated in arbitration panels to settle financial disputes.
"You learn to be precise and succinct in explaining things," said Holzberg, now a senior partner and chief investment officer at Holzberg Wealth Management in Corte Madera, Calif. "I'd ask precise questions to focus everyone's attention on the issues before us, and lawyers picked up on that."
Eventually, an attorney asked Holzberg to serve as an expert witness on a case. He enjoyed it and landed a side gig that has lasted to this day. Over roughly 40 years, he has testified as an expert witness in about 100 cases.
Want To Work As An Arbitrator Or Expert Witness?
Holzberg launched his wealth management firm in 2013. But he has continued his occasional work as an expert witness for a handful of attorneys who seek out his services.
"You've got to find the time for it," he said. "You're working for the attorney and you're devoted to the attorney's needs. Once a case begins, the demands of a hearing can take over your life."
Before advisors set out to become an expert witness, Holzberg suggests that they start by contacting FINRA to try their hand as arbitrators. The self-regulatory organization operates dispute resolution services, both arbitration and mediation, to tackle nonjudicial, securities-related proceedings.
"The industry needs more arbitrators around the country and FINRA has a program to train arbitrators," he said. "It's very important and satisfying work, and it pays better today than it used to."
In addition, advisors who become arbitrators can expand their network throughout the financial industry. They may also find the work intellectually stimulating.
"Arbitration is very challenging," Holzberg said. "But you learn a lot, meet interesting people and have more control over your schedule because you don't have to do a lot of prep work" compared with expert witness duties.
Serving as an arbitrator or expert witness is an outside business activity for advisors. That means if they work for a financial services firm, they will need its permission.
Prepare To Testify Under Oath
Once advisors gain experience as arbitrators, they can decide whether they'd like to become expert witnesses. The challenge becomes greater when they must testify under oath.
"You have to have a true mastery of your subject," Holzberg said.
Like lawyers, expert witnesses tend to gravitate to either the plaintiff or defense side. Holzberg wound up working with attorneys representing plaintiffs.
"In most public arbitration cases, lawyers work on contingency so they don't want to take on a lousy case," he said. "They rely on expert witnesses to assess the case beforehand. We deflect lots of cases upfront and weed out the ones that never should be brought."
Many expert witnesses work behind the scenes, helping lawyers analyze various theories of damages and computing potential payouts. But advisors must brace themselves for giving testimony in a legal proceeding.
"Sometimes you might be put on the witness stand," Holzberg said. "You will be cross-examined. You need the personality and skill set" to withstand the pressure and deliver fact-filled, concise replies.
He finds that the rigors of contributing to legal proceedings carries over into his practice as an advisor. It reinforces his ability to speak clearly to clients and explain complex concepts in plain English.
Such activities also sharpen his technical knowledge. It's easier to track ever-changing financial products and services when you must discuss them under oath.
"You're not an advocate," he said. And "you're not there to persuade. You're there to offer your expert facts and expert opinion."
