How to Tell When Someone is Lying

I studied the art of lying.

Once I did, my game improved immeasurably. I became one of the top performers where I worked.

You may not be doing any telemarketing, but as a financial advisor you’re still getting lied to. Here’s how to tell.

This usually means someone is lying

Here are the top signs there is some lying going on.

Signs of discomfort:

• • Pausing before a response
  • Throat clearing
  • Getting angry unnecessarily ("Look I don't know what to tell you")

Signs they’re trying to buy time:

• Starting the sentence with “Um, not sure, hard to say” or other non-essential transition phrases
• Asking you to repeat the question
• Asking questions about the question itself

Signs of manipulation:

• • Offering general responses (“We’ve got it covered.”)
  • Including too much information
  • Intentionally trying to confuse you
  • Accusing you of being ridiculous for asking the question

Example:

Did you spend that $50,000 that was earmarked for this year’s SEP contribution?

Innocent: We did not spend that $50,000 that was earmarked for this year’s SEP contribution.

Guilty: We didn’t do anything irresponsible with that $50,000.

• Addressing other people with indistinct terms

Example: Where did you get this idea about investing in life insurance settlements?

Innocent: My mother in law recently did one and was talking to me about it last week.

Guilty: Somebody I know told me about it.

How to handle someone who is lying

The first thing to realize about lying is that it has many causes; some are malicious and some aren’t. In the case of a financial advisor, the person is most likely lying to you because they don’t 100% trust you yet and they’re scared.

Most people who lie do so unintentionally as a defense mechanism. Nobody wants to think of his/herself as a liar. It’s something we do when we get caught off guard – remember those subconscious defenses we have?

Calling someone out on lying will polarize you and them. They’ll feel judged and accused and that leads in the opposite direction of the trust point you want to achieve.

Examples of things not to say:

• Why? (A lone “why” can be a very irritating question. Anyone have a three-year old? Why mommy, why why why why why??????)
• I don’t know if that’s [true, the case, what happened, what the real story is, etc.]
• Are you sure that’s right?
• Okay, sure (sarcastic tone)

When you catch someone in a lie, don’t make it so obvious that you know. Make it look more like there’s some miscommunication that you want to clarify. In other words, help them work out of the lie.

Example:

Forgive me. From my notes in prior conversations, I have down here that you’ll be transferring an additional $2 million, not $1 million, to the portfolio from your old brokerage account. You said that your investments went down by that amount over one week so you can’t make the full $2 million transfer now.

It seems as if there may be a missing piece here that I’m not seeing. Walk me through this – how did we get from Point A to Point B?

You say you didn’t spend it on a shopping spree, but if it somehow did get spent, could it perhaps have been spent on something like your kids’ tuition or to pay a medical bill? Or perhaps I just misquoted you when I wrote this down? I want to make sure we’re not missing something important like a wire getting sent to the wrong place.

Key things about how to do this:

• Use a non-accusatory tone of voice
• Speak slowly
• Include yourself as part of the blame (did I misquote you?)
• Give them lots of options so that they feel you’re not nailing them to the wall. If you offer them enough scenarios, chances are one of them is related to the real reason and they’ll probably take the cue and latch onto it. Remember, they don’t really want to deceive you.

Don’t use what I am about to say unless you have to

But by the way, if you’re really looking to catch someone in a lie and expose them, here’s how you would do it. This is a police tactic.

Liars tend to tell stories from beginning to end. They practice the details over and over again sequentially from start to finish. But if you ask them to tell you what happened in reverse order, they’ll mess something up. Just say, “Let me trace this from the end to the beginning. Starting with the final result of you having your IRA account wrongfully closed, what was the most immediate thing that happened right before that?” And then work through step-by-step.

Only use this if you really want to roast someone – for example, if they are making a claim that could result in serious legal action being taken against you.

Sara’s upshot

Getting to the truth about what’s really on people’s minds is a skill that will increase your value as an advisor. If you’d like more information and tips I’d love for you to join my membership here.

Sara Grillo, CFA, is a top financial writer with a focus on marketing and branding for investment management, financial planning, and RIA firms. Prior to launching her own firm, she was a financial advisor and worked at Lehman Brothers. Sara graduated from Harvard with a degree in English literature and has an MBA from NYU Stern in quantitative finance.

Read more articles by Sara Grillo