This paper examines how regional ethnic diversity and cultural alignment shape financial advisor misconduct. Exploiting a panel of more than 4.2 million advisor-year observations, we match county-level diversity with advisors’ surname-inferred ancestries. Advisors in more diverse counties are more likely to offend, but this effect weakens when their ancestry aligns with dominant local groups, suggesting cultural congruence mitigates risks. Mechanism analyses show that diversity reduces social capital and weakens informal monitoring, while the 2010 Dodd–Frank Whistleblower Provision reveals stronger regulation offsets these effects. The relocation patterns of misbehaving advisors reveal strategic responses to regional demographic contexts.