Ed Butowsky - Wealth Mismanagement: A Wall Street Insider On the Dirty Secrets of Financial Advisers and How to Protect Your Portfolio

Advance Praise for
Wealth Mismanagement

I have known Ed for over forty years and he has always had an empathy chip that has served his clients well and allowed him to rise as one of the financial services industries stars. This book is the best at helping investors determine if what they have is what they need.

Dennis Greenwald, Former General Counsel, Morgan Stanley

Ed has written a very down to earth, easy-to-read book that will benefit everyone, regardless of net worth. I encourage all to read this and adopt the CHIP score in all your investment decisions.

Peter Berg, Iconic Hollywood Director and Actor

Ed Butowskys Wealth Mismanagement provides investors with a practical and meaningful approach to creating an investment portfolio that will meet individual needs in retirement or otherwise. Often using autobiographical anecdotes, Ed provides an easy-to-understand, unvarnished review of why individual investment portfolios proffered by Wall Street institutions frequently fall shy of meeting an investors long-term financial needs, and how to remedy that circumstance.

If you are interested in preserving and enhancing your wealth over time, I recommend you buy and study this book.

John Williams, Founder, ShadowStats

Mixes entertaining personal stories with smart observations on the markets. Even Wall Street pros will learn new insights.

Rich Karlgaard, Publisher, Forbes ,and Author of Late Bloomers:The Powerof Patience in a World Obsessed with Early Achievement

I have been a client of Eds for nearly twenty years. He has always put my interest first and this book puts the investors interest first. After reading this book, you will understand if you have what you need in your portfolio. A fantastic read and one that will keep all financial advisors on their heels.

Joe Phillips, Serial Entrepreneur and Philanthropist

Eds not afraid to tell the truth. This book proves it. I have trusted and relied on Ed for years and he has always stood by his word. Pick up this book and see if your current portfolio has the characteristics you were needing.

Kris "Tanto" Paronto, American Author and Speaker as well as a former US Army Ranger and CIA Security Contractor

As an industry compliance professional for forty-seven years, I can vouch that this book was written through an investors lens and should be used to hold your current advisor accountable for their recommendations. This CHIP score, which is introduced in this book, will be the industry standard one day. Hop on it early. Sadly, your current advisor will not be happy you read this book.

Rhene Rog, CEO, Securities Broker Dealer and Investment Advisor Consulting

I have never had bad financial advice from Edhe is always spot on and ahead of the pack. This book is one not to miss.

Lara Logan, Award-Winning Foreign Correspondent for CBSs 60 Minutes

Ed is a good friend and mentor who has taught me a lot about finances. It's always good when you can sleep well at night knowing your money is in good hands. This is a must-read book and it will help you navigate through the fears we all have about investments.

Torii Hunter, MLB Legend and All-Star

If you have ever wondered how to truly evaluate how good of a job your advisor is actually doing, Eds book provides you with the tools necessary to find out. His candid insight reveals the lack of true risk mitigation being provided by many advisors in the industry today. It is a must read for anyone concerned with protecting their assets.

Benjamin Fujihara, Former Morgan Stanley Managing Director, Former Complex Director, Complex Council Member

I dont make financial move without running it by Ed Butowsky. This book will keep you from swinging at a bad pitch.

Cliff Floyd, MLB All-Star and Current Sirius XM announcer

A POST HILL PRESS BOOK

Wealth Mismanagement:

A Wall Street Insider on the Dirty Secrets of Financial Advisers
and How to Protect Your Portfolio

2019 by Ed Butowsky with Dennis Kneale

All Rights Reserved

ISBN: 978-1-64293-234-8

ISBN (eBook): 978-1-64293-235-5

Cover art by Cody Corcoran

Interior design and composition by Greg Johnson, Textbook Perfect

The information and advice herein is not intended to replace the services of financial professionals, with knowledge of your personal financial situation. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of any profit or any other commercial damages, including, but not limited to special, incidental, consequential, or other damages. All investments are subject to risk, which should be considered prior to making any financial decisions.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author and publisher.

Post Hill Press

New York Nashville

posthillpress.com

Published in the United States of America

This book is for Dani,
for her love and unwavering support
through every step of my life and career.

Contents

F or the better part of three decades I have been a wealth manager focused on protecting and growing the portfolios of my clients in an investing world ruled by the rival impulses of fear and greed. That termwealth manageralso means I have been my clients psychotherapist, rabbi, crisis counselor, and cheerleader, through times good and bad, scary and giddy.

I started my career with Morgan Stanley & Co. and spent almost twenty years at the fabled Wall Street investment bank, presiding over the personal fortunes of hundreds of rich clients, tech entrepreneurs, professional athletes, and other investors. Ultimately I shepherded the placement and protection of $11 billion in other peoples money. And while that might evoke Hollywood visions of Gordon Gekko furiously trading a hundred times a day, my investments had all of a 5 percent turnover in a year.

In 2005, after a career on Wall Street, I opened my own firm in search of a better way to serve clients and build their wealth. Only now can I tell you the truth about something that has bugged me and embarrassed me for years.

Finally it is time to admit it: Wall Street wealth advisers and the bulge bracket giants who dominate the business are failing their clients. In most every way that counts, they are falling short. The financial advice business is dysfunctional, self-absorbed, occasionally venal, and almost always kind of clueless. The people who earn princely sums to manage the wealth of their even-richer clients are good people who mean well, for the most part. They want to do a good job, and they believe they are doing a good job. But they are delusional.

They do what their Wall Street firms have told them to do, and they have been taught the wrong things to do by people who dont know the right things to do. They havent been trained in the most basic concepts of portfolio construction and how to measure and manage risk. They have little appreciation for some of the most important factors in managing money (risk, volatility, and cost-of-living increases), and they barely know the true financial needs of their clients.