The Adviser’s New Dilemma

Financial Infidelity



According to recent reports by Bankrate, there is a rising trend among millennial couples – more than half are committing financial infidelity against their current partner1. While this type of financial deception occurs at differing levels, from minor purchases to major money secrets, one commonly occurring theme is the absence of open communication among these couples regarding finances. The motivation for that lack of communication, however, is where the nuance of the situation lies.  

According to MarketWatch, financial advisers are finding themselves the neutral arbitrators of these issues, relied on for their ability to identify money conflicts and offer meaningful pathways to a resolution. Being that arbitrator, however, is a tricky road to travel often accompanied by a variety of potential landmines. That does not mean the task is impossible or that it should be avoided altogether, but rather that advisers must be careful when setting and pushing boundaries and controlling personal bias toward one party over another2.

First, it is important to understand that not everyone understands what financial infidelity is or that they themselves have perpetrated it in their own relationship. To illuminate this point, CNBC reports that a recent poll from the University of Southern Mississippi revealed that while 53% of participants claimed to have kept financial secrets from their partners, only 27% admitted to financial infidelity. This seems to demonstrate a fundamental misunderstanding of what constitutes financial infidelity, intentional or otherwise3.

But is it the job of a financial adviser to double as a marriage counselor? No, of course not. In fact, many advisers often find themselves in the middle of couples negotiating divorce already. According to Investor’s Business Daily, however, a financial adviser can spot red flags and diplomatically present solutions that serve to avoid or resolve conflict4. Some of those red flags are more obvious – a partner’s hesitation to answer questions about finance or undue secrecy regarding spending habits. Conversely, a partner might attempt to dominate the conversation during a financial exercise demonstrating an imbalance of power where collaboration is the healthier approach4.

Psychology Today reports financial management in relationships relies on elements of commitment, trust, power and control. The key to advising a couple actively dealing with financial infidelity is facilitating honest, open communication, then making unbiased recommendations by assisting with the creation of joint expectations and goals, making certain to keep clear of negative statements of blame. Encourage couples, regardless of their financial health, to have a monthly meeting or date reserved for discussing the state and trajectory of their shared finances5.

  1. Rossman, Ted. “Financial Infidelity Plagues Many Households, Led by Millennials.Bankrate. 19 Mar. 2021. Accessed on 6 Apr. 2021.
  2. Stettner, Morey. “Couples’ Money Worries Cast Financial Adviser in New Role…MarketWatch. 3 Feb. 2021. Accessed on 6 Apr. 2021.
  3. Hecht, Anna. “53% of Americans Have Kept Money Secret From Their Partner…CNBC. 5 Feb. 2020. Accessed on 6 Apr. 2021.
  4. Stettner, Morey. “Money Matters: How Attentive Advisors Detect Poor Communication…Investor’s Business Daily. 19 Mar. 2021. Accessed on 6 Apr. 2021.
  5. Krauss Whitbourne, Susan, Ph.D. “The Most Common Type of Betrayal in Relationships.Psychology Today. 12 Nov. 2019. Accessed on 6 Apr. 2021.


Source: MICPA

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