Tom was the heir to a large family fortune, inherited at a young age. He wasn’t really ready, but wasn’t given a choice in the matter.  Over the years he did a good job with it, despite the lack of preparedness. His family had raised him with the right values, put in place a good network of professionals, and he was committed to using his wealth to make a positive contribution to his community.

His passion wasn’t in business - it was in the arts. His fortune allowed him the space to explore the less commercial realms of artistic expression. He funded a gallery, and my visits there always left me a bit amazed at what I was seeing. It was always obscure, offbeat, and often difficult to process. But if the purpose of art is to make you feel something and leave a lasting imprint on you, then it was truly art, because I remember so many of the pieces I encountered there.

Tom had assembled a team around him to bring his vision to life. Although it wasn’t a purely commercial endeavor, he wanted to try to earn as much income as he could to fund his operations. He had hired an old childhood friend, Patrick, to serve as his General Manager, overseeing operations. Patrick shared Tom’s passion for art, and Tom felt confident that Patrick gave as much of himself to his projects as he did. 

As one of Tom’s advisors, over the years I began questioning a lot of seemingly odd investments, and expenses that just seemed too high to be reasonable. Patrick always insisted he would follow up and would come back to us with seemingly irrelevant changes and insignificant cost cuts. When I raised the matter with Tom, he kept telling me that things would change… we were so close to turning that corner! Working underneath Patrick there was a lot of turnover on the team, but Patrick was a constant. I really couldn’t see much that was going on below the surface.  All I saw was that we were drawing down Tom’s investment portfolio at an alarming rate.

My professional relationship with Tom ended prematurely. At a certain point I felt like we weren’t on the same page, and it was a struggle to get Tom to rein in his spending or to take my advice on other matters. We reached a break point when Tom brought on an insurance advisor, an old family friend of Patrick’s, to secure some insurance I had recommended he obtain. 

My recommendation was for a term insurance policy which we would terminate within 5-10 years, just enough time for Tom to build up a portfolio large enough to self-insure his estate taxes. But Patrick’s friend was a shark who saw blood in the water. This was an opportunity to score the biggest insurance sale of his career, and he just needed me out of the way to do it.  And so he did what it took to remove me from the picture. The details are not relevant, but let’s just say that Patrick’s friend created some slimy insurance illustrations and flat-out lied to make our team look bad. Tom’s allegiance of course rested with his childhood friend, and so our relationship was irreparably broken. Following the advice of Patrick’s friend, Tom ended up buying way too much permanent insurance at a very high cost. The insurance advisor made a killing. And my plan, which would have saved Tom millions of dollars, was left unused.

It was a painful break for me. I had nothing but Tom’s best interests at heart, and I felt betrayed by Patrick, who I had earnestly tried to help over the years. Perhaps if I had been more forceful earlier on, I could have been a better help to my client.

Time passed, and years later I received a long-forgotten Google alert I had set up earlier with Tom’s name. The story was about an embezzlement. Patrick had been fired, and was accused of stealing millions of dollars from Tom over the years. 

The news was shocking, but not surprising, based on what I had seen. 

Aside from the money, which was obviously a significant amount, I instantly felt for Tom. He was recently divorced. The only constant in his life over the years was his old friend, Patrick. All I could think about was the utter betrayal he must have felt. And the loneliness. Patrick was his best friend, and perhaps the only faithful presence in his life.  

If a childhood friend can betray you, is it any wonder that the wealthy keep their guard up against advisors they have just met, and people emerging from the woodwork after sudden wealth appears?

Another family I worked with offered to have a niece stay with their son in his apartment, which was located near the University she would be attending. They asked her to sign a lease and cohabitation agreement, lest she make a support claim against their son. “But that’s his cousin!” I recall saying, incredulously. “Can’t be too careful,” they replied.  They had also learned over the years not to trust anyone… including family.

You don’t need to end up living an isolated life in your own version of Citizen Kane’s Xanadu to experience the isolating impact of wealth on your life. Over the years, negative experiences can train you to be skeptical, suspicious, and wary of the motives of others. There is a tendency to cling to the people you believe you can trust, but as the story of Tom and Patrick illustrates, even that can go horribly wrong. 

I wish I could give you a set of rules - an easy “trust checklist” you could use to prescreen your employees and advisors.  

I would suggest that you identify someone who demonstrably shares your values - not just someone who brags about it, but someone who has a long track record that shows who they truly are.

From a professional perspective, beware the advisor who needs your account. If your assets are so significant that they can make a meaningful impact in your advisor’s quality of life, you need to be very cautious about handing the keys over to them. The temptation to misbehave with your assets could prove to be too much for them to avoid. 

Tom’s story stays with me to this day. I think about him occasionally. Texted him last time I was in his neighborhood and suggested we meet up at the gallery. There was no reply.