Pity Johnny Depp. Tough to do with a guy that has his own island, complete with three houses and a number of bays and inlets named after his children. And let’s not forget his mega-yacht to get him to and fro. It’s just a few of the extravagants that justify the need for top flight money managers.
Yet his high-profile split from actress Amber Heard has exposed money woes the size of Pirates of the Caribbean box-office receipts.
Depp accused his money (sorry “business”) management firm—who appear to have been his good buddies—of failing to file or pay his taxes, resulting in penalties and interest of $5.6 million.
“He also alleged the firm paid itself more than $28 million in contingency fees without any written agreement [emphasis ours]. Depp is calling for compensatory damages of more than $25 million, as well as other demands,” according to CNBC.
The business management firm, The Management Group, of course filed its counter-suit in Los Angeles, claiming Depp bought 14 homes, and “other costly toys.” The firm also alleged the actor spent more than $3 million to “blast the ashes of author Hunter S. Thompson from a cannon over Aspen, Colorado,” according to the network.
It didn’t have to be this way, and Yahoo! Finance’s Ethan Wolff-Mann goes one step further, linking it directly to the current “will it or will it not pass” fiduciary rule from the Department of Labor. Mann uses it to argue for the rule.
Depp, of course, thought his advisors were “behaving as a loyal fiduciary and prudent steward of his funds and finances,” which, says Mann, illustrates why the fiduciary rule is so important.
“In the realm of giving financial advice—like telling you what kinds of assets your retirement account should be invested in—‘fiduciaries’ are obligated to act in their client’s best interest, which helps prevent them from steering clients into less-favorable investments and decisions due to benefit the advisor,” he writes. “Like Willie Nelson, Nicolas Cage, Depp, and so many others before them, a lack of understanding of the wonky things a financial advisor does has plagued ordinary Americans.”
Yes, they’re just like the rest of us. Mann quotes the $17 billion in lost savings figure frequently used by the Obama Administration to argue for the rules implementation, before thankfully noting:
“Obviously, there is a stark difference between ordinary people looking to retire and the $2 million a month budget of the ‘Edward Scissorhands’ star. First off, the fiduciary rule would not have saved Captain Jack Sparrow’s booty. It would not probably not have protected his managers from allegedly plundering it, unless it was in a 401(k) or retirement investment vehicle, and it would not have capped his own spending for him and his ‘famille.’”
However, he concludes, “it’s no accident that financial advisors or managers lacking scruples can take advantage of people who simply aren’t educated in the argot of finance and don’t know enough to question the nice man selling them a confusing annuity who gave them a free dinner.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
