Remember Kenneth Starr? No, not that Kenneth Starr. Before a few days ago I didn’t know there was another Kenneth Starr either. Apparently, this Kenneth Starr was a financial advisor to the stars and apparently, that’s such a thing. Some of the clients listed were Sylvester Stalone, Uma Thurman, Wesley Snipes, and Martin Scorcese. Kenneth Starr was arrested for what else but running a ponzi scheme.

Starr has already been dubbed “mini-madoff” not only because of his scheme but how he got clients, by rubbing shoulders with his potential new customers at events he knew he could find them. Like any other dirtbag, he used the money to finance an extravagant lifestyle, not much different than the type his clients enjoyed. But he also took it a step further. Somehow, he managed to convince some of these people to open accounts with his name on it. There are so many no-nos being crossed here that it’s too easy to talk about them.

I’m not at all surprised that celebrities and other people with more money than they know what to do with end up getting screwed by Madoff like people. They don’t understand the value of money and everywhere they go they’re overpaying for products and services. In other words, there’s no shortage of people ready and willing to take advantage of them. Mini-Madoff Ken Starr is on the extreme end, but he’s still just a dude that took advantage of rich people.

If you’ve got too much money to manage yourself and you’ve got not enough motivation to learn anything about money, you have a simple way out: go to the big companies to manage your money. Everyone from Wells Fargo to Goldman Sachs has specialized divisions that exist simply to serve clients with more money than brains. You’ll pay out the yin-yang in fees, but you’re already doing that at some boutique place that your co-star recommended in between lines of blow. The benefit of going to these big firms is you’ll be dealing with someone that probably couldn’t squander all your money even if they wanted to. And if they somehow managed to do it, you can at least sue the crap out of the firm to get your money back.

But just in case you want to learn something about money I’ve taken the liberty of giving you a list of desirable traits of your financial advisor to get you started:

  • Middle-upper middle class (but not loaded)
  • Have no legal claim to your money
  • Have a CFP
  • Should not be your friend

So that’s what your financial advisor should be, and that’s seriously sufficient. The Reformed Broker has a list of what your financial advisor should not be; the hilarious post gives special emphasis to stars and is such a must-read it was the whole inspiration for this post.

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categories: banking, personal finance, weaky