In another example of the dangers of "outsourcing" management of your wealth, Australian artist Ken Done is suing his financial advisers for $53 million, claiming he lost three-quarters of his personal fortune through bad advice. The 67-year-old's money was apparently invested in risky loans and investments in little-known companies that failed - including stakes in two soccer teams, a beauty spa and an obscure Maltese biotechnology company.
If, as he claims, he gave instructions specifying that only 20 per cent of his money was to be put into speculative ventures, he may be able to recover some of his lost fortune through legal action. Done alleges he was misled by false accounting entries and that he paid nearly $2 million in fees over six years.
However, it appears unclear how much of the loss was due to advice from his financial advisers and how much could be due to the actions of the accountancy firm and the principal accountant responsible for Mr Done's financial affairs. In any case, it again highlights the fact that you are ultimately responsible for managing your own financial affairs, and you should keep a close eye on the actions taken on your behalf by "hired help".
Copyright Enough Wealth 2007