From the beginning, business managers were more than accountants (or less, depending on your point of view). Anyone could put up a shingle and call himself a business manager; there was no test to take, no license to procure. Though many business managers were also CPAs, filing tax returns was the least of their duties. And there was another key difference: CPAs billed by the hour, whereas business managers took a cut of their clients’ money—usually 5 percent.

Then as now, business managers not only pay all their clients’ bills, they advise on what houses they can afford and which banks to finance them through. Business managers buy the cars, the planes, and the boats; hire the gardener, file the nanny’s taxes, and take care of estate planning; put wills in order and make sure pensions are secure. In the case of campaign contributions, chances are that the address filed with the Federal Election Commission is the business manager’s, not the client’s.

The nature of film and TV production has made business managers a necessity for many in the industry. It’s difficult to keep one’s financial affairs in order while, for example, shooting a movie for three months in a Bolivian jungle. It wasn’t long, though, before nearly everybody, established and aspiring players alike, had a business manager. It was more than a convenience; it was a status symbol, proof that one was busy enough to have to delegate personal chores and well-off enough to need professional advice.

Michael Miskei is a forensic accountant who specializes in the divorces of wealthy clients, many of them in Hollywood. When it comes to business managers, he says, “there’s a subtext to all of this that has to do with status and celebrity. It’s very 18th-century France, the notion that they’re not like the rest of us.”

And in fact, Miskei adds, they’re not. “Some of these people refuse to organize themselves. They have personal assistants to ensure that their errands are done. They have agents that book their work, managers who guide their careers, attorneys who look after them. They’re used to having lots of handlers, a team of people to whom they delegate everything. So it’s a natural fit for a business manager to come in and say, ‘I’ll take care of your financial life.’ ”

By one estimate, Los Angeles is home to more than 50 business-management firms and countless one-person shops. The ease with which one can enter this quasi-profession means a lot of practitioners don’t know what they’re doing. (One of the more established business managers guesses that 90 percent of his competitors are subpar.)

Still, the field probably offers the best access to celebrity nest eggs. I first learned this from Ryan Kavanaugh, who, in 1997, at age 22, launched a venture-capital firm that attracted a who’s-who list of Hollywood investors: producers Jerry Bruckheimer and Jon Peters; Terry Semel, then co-chairman of Warner Bros.; Jonathan Dolgen, then chairman of Viacom Entertainment; and Jim Wiatt, the power agent who has since been made CEO of the William Morris Agency.

Then, poof, Kavanaugh’s firm went up in smoke, prompting five lawsuits against him from irate investors who had lost money. While Kavanaugh may be an irresistible salesman, it is still surprising that so many of the entertainment industry’s heaviest hitters had handed over their cash to a twentysomething kid with no MBA and little investment experience. When I asked Kavanaugh, now a movie financier, how he’d landed such big fish, he said it was simple.

“I got really close to a lot of business managers,” he said. “It spread through them.”

Still, those who wish to blame the business-manager culture for the Madoff-related losses should resist the urge. As one movie producer told me, “The story isn’t the few that got their clients in; it’s how many kept their clients out.”

“Our job is to talk people out of those things that are in vogue but without any proven substance,” says Howard Altman, a partner at the Beverly Hills business-management firm Grant Tani Barash & Altman (which, according to Federal Election Commission records, has actress Jennifer Garner and studio chief Jeff Robinov of Warner Bros. as clients, among others). “Many of our clients do not have the time, the ability, or the interest to meet the actual person who’s going to execute the trade or structure the investment. In fact, their expectation is they’ve hired us to simplify the process so that they do not have to.”

In sharp contrast to the East Coast, where people often bragged of their status as Madoff clients, in Hollywood, many clients didn’t even know they had invested with him. According to more than one West Coast investor, their business managers provided them with account documents in which Madoff’s name was never mentioned.

“I got statements four times a year. But they didn’t list transactions, just a grand total and what our percentage return was,” says one former television-marketing executive who lost all of her savings, $600,000, which she had invested in a Madoff fund.