Glossary entry
Due diligence is a structured investigation used to assess a proposed investment, transaction, or service provider. It can examine financial statements, business assumptions, legal terms, management, fees, custody, and regulatory records. The depth should match the stakes and complexity, while independent verification helps distinguish evidence from sales material or unsupported claims.
Illustrative example
Before buying a bond, an investor reviews the issuer's accounts, repayment schedule, seniority, restrictions, and risk disclosures instead of relying only on its advertised yield.
What to consider
Due diligence reduces information gaps but cannot guarantee an outcome. Missing, inconsistent, or unverifiable evidence should affect the decision itself.
General information, not a personal recommendation. Product availability, rights, and obligations are determined by the relevant provider, jurisdiction, and approved agreements.