From the June 2008 issue of Investment Advisor • Subscribe!

June 1, 2008

Dealing With an Inveterate Liar

Thankfully, there aren't many people in our midst who are able to act dishonestly and destructively without guilt or remorse. Research on these truly disturbed individuals shows that traditional therapy methods fail with them.

As a former psychotherapist, Larry Moskat has a view of persistent liars that is more optimistic than most. Now a Scottsdale, Arizona, financial planner, he writes: "Dealing with the chronic liar/cheater, I believe, requires a more gentle touch and an acceptance of the person as they are--troubled and insecure--while gently but firmly beginning the process of dislodging their alter-selves and supporting the person underneath whom they loathe. Once trust is established, these people will begin to feel free to talk the truth as they come to learn they will not be penalized for truthfulness and honest self-expression. Self-loathing will eventually give way to a renaissance of self-assurance and self-confidence, rendering the lies unnecessary, undesired, and ultimately extinguished."

I would add the caveat that a good outcome probably depends on the degree of dishonesty, as well as the person's ability to experience true remorse and regret for his or her actions and their effect on others. Advisors without the training or inclination to deal with such a troubled personality may do better to back away, as Keith Newcomb suggests. Newcomb, a financial planner and wealth manager at Full Life Financial in Nashville, Tennessee, told me, "One thing I've learned as I've gotten older is that, for me anyway, the key to dealing with a chronic liar or habitual cheat is simply don't deal with them. One certainly cannot change them. If you must deal with them, plan for all the contingencies 'cause you never know what they're going to come up with."

This may be the wisest course of action when you encounter clients or colleagues who lie as a way of life. New brain studies offer hope that science can actually begin to alter the brain function and chemistry of psychopathic liars. But until research identifies a successful avenue of treatment for people who lack an appropriate sense of remorse and responsibility, it may be too dangerous for you to deal with them at all.

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