Financial infidelity — hiding financial information from a partner — is a topic wealth advisors often have to address with clients. Advisors weighing in said secret cash transactions, private accounts and not disclosing investments are behaviors they often see, and that conversations with clients participating in the behavior must be approached neutrally and with care.
Financial infidelity isn't born out of a numbers issue, but rather
Financial infidelity can come in many forms. Guli Fager, a wealth advisor at Baltimore-based Toler Financial Group, said one not often talked about is when spending isn't kept a secret, but the money itself is. When going through statements, she sometimes sees transactions for hundreds of dollars from an ATM, every day. It indicates that someone is hiding a secret bigger than money.
"If you use your imagination about what would someone need $300 every day to spend on, it's usually drugs, sex work or gambling," Fager said.
In some cases, discovering these transactions is the last straw before divorce, Fager said. The money is sometimes clearly being spent on something sexual, or on gifts or experiences given to someone else — not the person's partner.
A 2023 study by Forbes Advisor and Prolific found 38% of U.S. adults have lied to a romantic partner about their finances at some point in their lives. According to the Fidelity study, nearly 50% of survey respondents say they avoid money talks with their partner to prevent arguments.
Before financial planning, Fager led a career in sexual education. This experience helps her facilitate difficult conversations about infidelity with clients in a neutral, productive way.
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"When we're doing the initial review of their transactions, advisors need to approach it as 'Huh, there's an awful lot in this cash ATM category.' We don't need to know every single thing, but ask, 'Is there something that you usually use cash to pay for?'" Fager said.
Then, the clients can narrow down the consistent ATM transaction to something like paying the housekeeper or lawn company, or figure out if something more secretive is going on behind the scenes, Fager said.
Brent Gardner, a Dallas-based independent insurance broker, said he doesn't refer to money separation between couples as "financial infidelity," but rather, just privacy. He often sees couples keep money private from one another due to certain secretive careers like government, military, or even business owners, lawyers or politicians.
Sometimes, couples just simply don't trust one another.
"I've had wives call me on the phone and say, 'Hey, could you set me up a brokerage account in my name only,'" Gardner said.
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He's even had experience delivering death claims to trusts that were established for the benefit of illegitimate children, a mistress, or even for the benefit of children that were not fathered by their husband.
Dealing with money and financial planning inherently warrants privacy. Gardner said if an advisor or broker can't keep a secret, then don't do business with people who need them kept, for the sake of building and maintaining a client base.
"This is a theme that I come back to quite often," Gardner said. "Everybody in the craft of advice, regardless of what channel they're in or how they get their money, almost every single problem they have is solved by one thing, and it's prospecting."
Shane Tenny, financial advisor and managing partner at Charlotte-based Spaugh Dameron Tenny, said apart from secret spending, affluent clients have tendencies toward secret saving. Someone may learn about a private investment and then decide to pursue it without disclosing it to their spouse, Tenny said.
"I've noticed that when children leave the house, or for couples who have no children, the 'empty-nesterness' brings space and time to pursue 'intellectual restlessness' by researching topics," Tenny said. "For those with an interest in investing topics, this leads to learning about new things and, given their stage in life, the financial ability to choose them without consulting their spouse."
Like Fager, Tenny said a relationship can be repaired with the transparency facilitated by a financial planner. But when it gets extreme, it can
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Personal biases, opinions or judgements can fall through the cracks when advising clients about financial misbehavior with their partners. Tolerating and controlling your own emotional reaction to the client's actions, and emotional reaction to a client's reaction about being inquired about it in the meeting, is a large part of approaching financial infidelity, Fager said.
"Your own personal values about human behavior, and often sexual behavior, are not relevant," Fager said. "The situations reveal personal information about the clients that sometimes is none of our business."
