Every so often, a story so perfectly illustrates what can go wrong when you trust someone with your money that it serves as a kind of user's manual for any investor who comes along afterward.

And so it is with the tale of Philip David Horn, the Wells Fargo broker who recently pleaded guilty to trading in clients' accounts, canceling the trades and helping himself to the profits. He may very well end up in jail, just as soon as the federal judge can figure out how much money is at stake and how to make those clients whole.

All the juicy stuff is here, as my colleagues Jessica Silver-Greenberg and Susanne Craig laid out last month. There are the country club solicitations, the brokerage firm that finally figured out what was going on after more than two years and the chastened Horn putting 800 hours into volunteer work and begging the judge to keep him out of prison.

But on the other side of those trades were sophisticated clients, including a lawyer and retired pharmaceutical and aerospace executives. They didn't notice what was going on, something that Wells Fargo's lawyer pointed out four times in just a few minutes at a hearing last month in Los Angeles.

So should Horn's clients have seen this coming? Perhaps not. But could they have? In hindsight, there were four signs that things weren't quite right.

Broker bragging

Horn reportedly bragged on the golf course about his trades and then pulled paper records out of the trunk of his car in the country club parking lot to back up his boasts.

This is objectively odd behavior. Pitches should take place in an office or at a meeting spot of a potential client's choosing, over a sober deck of PowerPoint slides perhaps.

If brokers want to brag about past performance, however, ask them this: Can you show me audited, long-term results across every part of all of your clients' portfolios? And can you guarantee that your good calls were related to skill and not luck?

Broker trading

The couple who suffered the most losses had multiple accounts with Horn, and their monthly statements, in aggregate, often ran more than 300 pages. Horn hid his in-and-out trading among all that verbiage.

Like it or not, if you're putting your money in somebody else's hands, you have the responsibility to read every line of your statements every month. People like Horn, who was a friend to many of his clients until he wasn't, count on the fact that you won't.

Then, if there is a lot of trading going on. you have the right to ask why. In a 1999 paper in the American Economic Review titled "Do Investors Trade Too Much?," Terrance Odean, now a professor the Haas School of Business at the University of California at Berkeley, answered in the affirmative.

His 1999 research, which examined a group of discount brokerage customers, found that on average the things investors buy actually underperform the things they held in the first place. Their returns are reduced through trading.

The question for your gunslinging broker, then, is this: What makes you so much smarter than everyone else in the market? And is it even remotely possible that, on average, you'll be on the correct side of large numbers of trades?

Broker flamboyance

In 2011, Horn invited some of his clients to his 1970s-themed 50th birthday party.

It was at his country club, and he handed out CDs that said "Phil's Saturday Night Fever" on it with his head pasted in where John Travolta's should have been.

Financial advisers are free to charge as much as the market will bear, and there is no law against living comfortably and throwing themselves parties while they're at it.

But if I had gotten an invitation like this, I would have wondered where my broker was when the self-awareness genes were being handed out.

Your complacency

Some of Horn's clients considered him their friend. But that is what confidence men count on, because they know that the most trusting among their clients will let their guards down.

Others figured that because he worked for a big brokerage shop, there must be people looking over his shoulder.

But if we've learned anything at this point, it's that we should be more wary of people who work for large financial institutions, not less.

Horn's marks were themselves sophisticated in any number of ways. Once you've achieved a certain station in life, it's easy to fall into the trap of thinking that you know a thief when you see one or that you'll recognize a crooked scheme before the crook has taken you in. But most successful people do not, in fact, know enough about the ins and outs of investing to see through fraud when it's happening.

Still, the warning signs were there.

If you happen to run into an adviser prone to bragging, trading and disco parties at country clubs, check yourself to see whether you may have been just a bit too complacent.