As I was flipping channels one evening, I stopped on CNBC to listen to a story on the show American Greed. It was the Kenneth Ira Starr episode of how he created his $30 million dollar ponzi scheme using the funds of his high-profile wealthy clients such as Sylvester Stallone and Wesley Snipes. (As you may know, Mr. Snipes is currently serving his sentence in jail because of the taxes he owed to the IRS.)
What struck me about this story was the woman featured, Heiress, Rachel “Bunny” Mellon. He stole $5.75 million from Ms. Mellon’s estate. As I researched information on Ms. Mellon, I discovered that until this incident she had maintained an extremely private life. She was even quoted in a 1969 issue of the New York Times saying, “Nothing should be noticed.”
As I listened to the program, I became highly disturbed at how Mr. Starr gained access to her fortunes by doing several things:
- He gained her trust because he was the advisor to her now decease spouse. She maintained her relationship even though she did not deal with him regarding their finances while her husband was alive. She allowed her husband to handle these matters.
- Mr. Starr used his influence to isolateher from her immediate family. He maneuvered to keep them far away from any of her financial dealings with him.
- In excluding her immediate family, Mr. Starr then presented fraudulent financial and legal documentation to Ms. Mellon for her signature. She unknowingly signed over complete authority of her accounts to Mr. Starr.
As I listened intently and compassionately to the story regarding Ms. Mellon, I felt a range of emotion starting with sadness and sorrow then leading to anger and disgust. All I could think about was how she represents what can and have happened to women, such as our mothers, grandmothers, aunts and extended women family members, when they are mislead, misinformed, and isolated from the people they trust.
As a woman financial planner, I feel extremely passionate about protecting women. This is why I find it so important for women to do th e following things:
- Talk to several financial professionals before deciding on one to manage your finances. Feel free to take someone you truly trust along with you during these meetings. I like the saying “Trust but verify.”
- Review your financial statements and all relevant legal information regarding your estate regularly. This way you can detect any irregularities.
- Read all documentation you have to sign carefully and completely, even if you have to take it home and review it several times. You need to understand what you are signing and why.
- Do not be quick to make a decision. It is your portfolio and you have every right to take as much time as you need to make the best decision for you.
- Listen to your instincts regarding the people you include in your circle. I truly feel that when there are misgivings about a person you know it ahead of time but ignore it. Listen to you; you truly know what is best for you.
Women remember one misstep can truly wipe out your entire financial future. The majority of financial professionals are not Mr. Ken Starr; but instead, are honorable individuals who truly desire to help their clients achieve their personal goals, dreams, and aspirations. However, I do suggest that you take precautions. Evaluate your current and potential advisor’s approach to portfolio and client management to determine if it aligns with your expectations but never forget to rely on your senses to judge the character of those you chose to engage with in business.