NBA star Tim Duncan became the latest professional athlete to file suit against his financial advisor. He alleges that Charlie Banks, who he’s been working with for 17 years, pushed him into investments despite conflicts of interest that ultimately resulted in substantial loss.

“I invested in a series of opportunities presented by Charles Banks, on his assurance that we were working together for my family’s long-term financial security,” Duncan said. “Banks exploited my good intentions and our relationship for personal gain and my substantial loss.”

Specifically, Duncan accuses Banks in the complaint of defrauding him through a $7.5 million loan to Gameday, a company Banks controlled, which subsequently obtained a $6 million bank loan with what Duncan alleges is his forged signature.

While you may feel bad for Duncan, consider this: he did absolutely no homework before beginning this critical relationship. If he had, he would have discovered that Banks is not a Certified Financial Planner (CFP) professional, is not registered with the SEC, and is not affiliated with any company.

This case is still pending in a Texas state court, but it certainly isn’t the first time an investor has felt defrauded by a financial advisor he thought he could trust. How can you ensure this doesn’t happen to you? Here are a few tips:

• Complete a thorough due diligence process before selecting someone to provide financial advice, especially as it pertains to investing, including speaking with some current clients.
• Accept referrals with a grain of salt, still thoroughly vetting the advisor before signing on the dotted line. (Remember Bernie Madoff? Many people trusted him with large sums of money strictly because someone vouched for him.)
• Insist on regular reporting, always keeping an eye on the status of your portfolio so you can immediately question any anomalies.
• Insist on transparency, something that may best be obtained by working with a fee-only advisor whose sole loyalty is to you.

You might not be able to sink field goals or free throws like Duncan (or earn almost $225 million playing basketball), but you can learn from his unfortunate experience with his financial advisor.