Bob Gucer, a certified financial planner, had been working with a client for 20 years when he discovered a secret that the person was hiding.
It was $135,000 in credit card debt.
"Up until that point, he had told me he didn't carry any, that he always paid it off," said Gucer, a wealth advisor and managing principal at Benedetti, Gucer & Associates in Atlanta.
The client also hadn't told his spouse.
"When he came clean with me, he reluctantly agreed to tell his wife," Gucer said. "They were in their late 50s or so, and this debt was potentially going to take them to a bad place."
While Gucer helped them come up with a game plan to pay off the debt and they are in a good place now (they also thanked him for saving their marriage), hidden debt is one of those things that has the potential to entirely derail a financial plan.
Not every advisor takes a comprehensive look at their clients' financial lives and considers aspects ranging from cash flow and budgeting to retirement and estate planning. Those who do, however, say their advice can only be as good as the accuracy of the information they're given.
"Even if it's something embarrassing, not sharing it can make everything more difficult," Gucer said.
Of course, credit card debt is only one of the things that clients might not want to fess up to.
It can be difficult to talk about, say, an estranged child or one with addiction issues. Yet those relationships can matter.
For example, CFP Robert Braglia had clients years ago who simply refused to talk about an adult son, although they kept him in their will.
"The wife passed away, and the husband passed away shortly thereafter," said Braglia, president of American Financial & Tax Strategies in New York. "A lot of money went to the young man, and it was all spent."
As it turned out, the child was in the throes of substance abuse. If the clients had been open about it, Braglia could have helped make sure they created a trust or other entity to prevent their son having unfettered access to his inheritance.
"They could have protected him from himself," he said.
Braglia also once had a client who had a wife and children in America and another family in Europe.
"He wanted to make sure he was taking care of both," Braglia said. "If he hadn't disclosed that he had two families, the planning would not have been optimal."
Advisors typically want to know about ex-spouses, child support or other legal agreements, or any other relationship in your past that comes with financial implications or obligations.
Even if it's just cash you have in a savings account, your advisor generally should know about it.
Basically, it's a piece of the puzzle. Some assets get different tax treatment than others, which can influence an advisor's recommendation on what source of money you should turn to for various needs or wants and when.
Also, undisclosed accounts could throw your asset allocation — how your money is divvied up among stocks, bonds and cash — out of whack.
When advisors determine that mix, it's based on your risk tolerance. That generally refers to both your ability to stomach swings in the market and how long until you need the money.
"We can't build a portfolio based on your risk tolerance and have it be accurate if we don't know what you have elsewhere," Gucer said.
The importance of disclosure also applies to other assets or sources of income, including life insurance policies, real estate, variable annuities, pensions, alimony and the like.
Thinking about your own death — or any infirmity prior to that — generally isn't pleasant.
Yet health and longevity factor into financial planning. In retirement, for example, the average couple is expected to spend $280,000 on health-care expenses alone, according to Fidelity Investments.
If you have a family history of a particular disease or you have a condition that affects your life expectancy, your advisor likely wants to know.
"A good advisor will think forward and figure out what it means for your plan," said Eric Walters, a CFP and president of SilverCrest Wealth Planning in Greenwood Village, Colorado.
"For example, if your family has a history of Alzheimer's disease or memory, you should know that caring for someone with that is a lot more expensive than some other health issues," Walters said.
The bottom line is that to the degree you feel comfortable, it could be better to overshare information with your advisor than to withhold it.
"It's really important for people to find an advisor they trust so they can be candid about uncomfortable things," Braglia said. "You want to be able to tell the advisor and let him or her say 'Nah, this isn't important' or 'I'm so glad you told me so we can tend to this.'"