This document summarizes an investment by Mark C. Hutchinson, CFA, director of Private Banking at Credit Suisse Securities. Hutchinson began his career nearly 25 years ago and manages over $1.5 billion in assets for high net worth clients. The document provides biographical details on Hutchinson and describes his approach to helping clients navigate the markets by following principles like intense client knowledge, thorough diversification, and avoiding leverage. It also includes Hutchinson's responses to common questions, providing advice on topics like reviewing beneficiary paperwork, asking the right questions about investment ideas from friends, and slowly investing a large one-time sum of money over multiple years.

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THE EVOLUTION OF FINANCIAL INTELLIGENCE
WORTH.COM
VOLUME 20 | EDITION 06

2. I N EVER L EAVE HOME WITHO UT…
WHAT’ S ON MY DESK …
MY H O B BI E S ARE…
Chicago, IL Leading Wealth Advisor
Credit Suisse Securities LLC
MarkC.Hutchinson,CFA®
Director—PrivateBanking
How to reach Mark C. Hutchinson
Please e-mail me at mark.hutchinson@credit-suisse.com.
My brother’s watch
Pictures of my daughters and
stacks of annual reports
Collecting out-of-print books
about the stock market—the
past can be prologue
About Mark C. Hutchinson
Mark C. Hutchinson, CFA, director of Private Banking at Credit Suisse Securities, began his career nearly 25
years ago at Lehman Brothers in Chicago and until 2010, was managing director of wealth management at
Morgan Stanley Smith Barney. He is an avid collector of Wall Street books, with a private collection
comprising of over 2,500 volumes and is a regent of the CFA Institute's Financial Analyst Seminar and past
president of the CFA Society of Chicago. He is a graduate of DePaul University and has an MBA degree from
the University of Notre Dame.
AssetsUnderManagement CompensationMethod
$1.5 billion Asset-based fees
MinimumFeeforInitialMeeting ProfessionalServicesProvided
None required Planning, investment advisory and money management services
MinimumNetWorthRequirement AssociationMemberships
$5 million CFA Institute
LargestClientNetWorth Email Website
$8 billion mark.hutchinson@credit-suisse.com www.credit-suisse.com
FinancialServicesExperience
24 years
Credit Suisse Securities LLC 227 W. Monroe Street, Suite 3100, Chicago, IL 60606 312.345.6828

3. R E AC H I N G FO R Y I E L D :
I F I T LO O K S TO O G O O D
Chicago, IL Leading Wealth Advisor
TO B E T R U E …
Credit Suisse Securities LLC
MarkC.Hutchinson,CFA®
Director—PrivateBanking
Howhaveyouhelpedyourclients
navigate throughthemarkets?
ByMarkC.Hutchinson
Our practice follows simple princi- someone is offering to lend you money
ples to serve current and new clients’ is no reason to borrow it.
interests no matter what the market Pay attention to inflation. My
conditions. We would counsel investors grandfather Hutchinson was a partner I believe that more money has
to make certain their advisors follow in an NYSE member firm. He retired in been lost reaching for yield than
these principles: 1970 as a millionaire and was invested at the point of a gun. Buying only
Intense client knowledge. To under- completely in bonds. In 1970, $50,000 the highest-yielding stock, bond
stand the full complexity of their tax-free income was big money, but or other investment (or even
financial profiles, we meet with clients by 1998, his earnings were hardly worse, buying them on margin or
regularly, as well as with their spouses, enough to sustain him and his wife. in some sort of leveraged prod-
life partners, lawyers, CPAs, etc. It A balanced approach that protected uct) is a formula for disaster. If
allows us to become trusted confidants his savings from inflation would have you cannot explain how an invest-
so that all manner of issues, including made all the difference in how his ment generates above-market
those that might be considered “fam- final years turned out. returns, you probably should not
ily only,” can be thoroughly vetted. Be anticipatory and pragmatic in own it.
Being a real advocate requires deep equal measures. I believe that waiting With fixed-income products,
knowledge—it cannot be done with for all of the evidence to arrive will generating above-market returns
only a partial view of the mosaic. In put an investor at a permanent dis- generally happens either through
short, the simplicity of trust has an ele- advantage. Taking anticipatory action leverage, credit research or
gance that sophistication cannot touch. ahead of time pays, although I am through trading. Always separate
Enforce thorough diversification. willing to reverse myself if the evidence the underlying investment return
Our job is to keep people wealthy and changes. It is OK be wrong. It is not from the return on leverage. Any-
to prevent them from ever having to OK to stay wrong. one can leverage something up.
say, “I was once rich.” We make it a Research-driven fundamental You need to ask, “What does the
point not to let our clients love things approach. Using the balance sheet business or investment actually
that will not love them back. as a starting point for equity and
earn?” That exercise was com-
Avoid the use of leverage. Using fixed-income research will immedi-
pletely ignored by many in the last
borrowed money to try to enhance ately separate weak companies from
cycle, with disastrous results. As
investment returns is generally a bad the strong. In my opinion, if you are
the saying goes, if something looks
idea. Buying leveraged products and not willing to be a lender and own a
too good to be true, it probably is.
then leveraging them up even more company’s debt, why would you ever
is an even worse idea. Just because want to own its common stock?
Credit Suisse Securities LLC 227 W. Monroe Street, Suite 3100, Chicago, IL 60606 312.345.6828

4. I F YO U D O J U S T O N E T H I N G
AFTER READING THIS…
Chicago, IL Leading Wealth Advisor
Credit Suisse Securities LLC
MarkC.Hutchinson,CFA®
Director—PrivateBanking
Whatpaperwork shouldyoushow
youradvisor?Inaword,everything!
ByMarkC.Hutchinson
If you expect your advisors to provide cates of deposit versus expired letters of
real-world, 360-degree advice, they credit or repaid loans? If so, those are
need a look at your entire financial funds that can be instantly freed up.
picture. One of the biggest advantages Are the beneficiaries of the pension Ask your IRA or pension plan cus-
of working with professional advisors plan, IRAs and insurance policies todian to confirm in writing who,
is the level of organization they can correct? You really would not want or what, is the beneficiary of your
help you achieve in order to understand your former spouse to inherit money account. These assets transfer after
your finances. from you, would you? That happens death based upon the instructions
The minimum starting point for nec- thousands of times every year due to on file. Confirming periodically that
essary paperwork would be the following: the failure to perfect paperwork. the instructions are correct is just
Bank statements, brokerage statements, Are all of the accounts properly plain smart.
fund of fund statements, hedge fund titled? Setting up a living trust with your If you have set up a trust to be
statements, restricted stock/option grant lawyer and failing to transfer assets into the IRA beneficiary, the custodian
statements, IRA/pension plan state- it is the equivalent of never setting up the should have that on its system. If
ments, wills and trusts, private equity trust. Your estate lawyer would tell you he the beneficiary is your spouse, not
partnership statements, life insurance sees it happen regularly. only should the custodian have
policies, income tax returns, homeown- Have your wills and trusts been that on file, it is very important
ers insurance policies, auto insurance reviewed since their original execu- that you also have contingent
policies, umbrella insurance policies, tion? Are your designated executors beneficiaries listed in the event
directors and officers liability policies, still the people who you would want that your current beneficiary dies
employment contracts, mortgage state- acting in that capacity? Our legal before you do. Most people list
ments and loan statements. team suggests that those documents their children or charities as con-
What can be done with all of that be reviewed at least every five years. tingent beneficiaries. The conse-
paperwork? The first step is to assemble Is your umbrella liability policy, quences of not having contingent
all of the information into a consolidated which protects you above and beyond beneficiaries could be that instead
balance sheet to create a comprehen- your homeowners and auto insurance of them receiving the funds and
sive net-worth statement. Then, on an policies, big enough and with a strong paying the taxes over many years,
account-by-account basis, due dili- enough carrier to protect your net they could be required to pay all of
gence can be done on your behalf. Due worth in the event of a serious accident the taxes immediately. Beneficiary
diligence with a set of statements like or lawsuit? paperwork is simple and easy to
this is really where great value can be I could literally go on all day about the amend, but all too often, once
maintained—not created so much, but importance of paperwork, but simply executed, it is never revised.
maintained. Questions you need to stated it comes down to this: In the
ask include: details and in the fine print of your
Are the bank deposits at any one investment paperwork lay many key
institution in excess of FDIC insurance details that make no difference at all—
limits? Are any banks holding certifi- until they make a world of difference.
Credit Suisse Securities LLC 227 W. Monroe Street, Suite 3100, Chicago, IL 60606 312.345.6828

5. Chicago, IL Leading Wealth Advisor
T E L L I N G A TO U T F R O M
SOMEONE WITH REAL
Credit Suisse Securities LLC
INSIGHT
MarkC.Hutchinson,CFA®
Director—PrivateBanking
Whatareimportantquestions to
askwhenafriendoracquaintance
givesyouaninvestmentidea?
ByMarkC.Hutchinson
01 How does the company make
money? If it is not profitable now,
what will have to change to make the com-
shares outright, or where management
only has stock options? Stick with the
company that has management with equity
pany profitable in the future? When exactly ownership. Managers and executives
I hope the questions pre-
is the company expected to be profitable? who have only upside via stock options
The answers to these questions may just and no downside via ownership of common sented here help you as
stun you. stock behave very differently than those they have helped my
with actual money invested. clients. Having too much
information prior to making
02 Is the company fully reporting
to the Securities and Exchange
Commission? Have you looked at its finan- 06 Are any insiders currently sell-
ing stock, or have any insiders
an investment is never to
your disadvantage.
cial statements? recently bought any stock? If you do just one thing
after reading this: Start
taking notes of the name,
03 How is the stock currently valued?
Price-to-earnings ratio, price-to-
book ratio, dividend yield? Price to cash
07 Does the company need to raise
money anytime soon to carry out
its business strategy? If so, that may present
price and date when friends
give you investment ideas.
flow? Priced to infinity with no earnings a better time to invest. Over time, keeping track of
or book value? past ideas is one of the
04 How much has the person giving
you the idea already invested in
08 What are the risks here in the
business, and who are its com-
petitors? Does it have a better product or
easiest ways to differentiate
between a tout with no real
insight and someone with
this idea—in dollars or as a percentage of a service and is there a big enough market genuine investment insight.
portfolio? Did the person just buy in, or is for what it is selling for real wealth to be
this merely boasting about an investment created?
made years ago that is now going up? This
is an important question.
09 What sort of loss limit does your
tipper have on the investment? A
05 How much skin in the game does
management of the company
have in terms of outright ownership of the
hard stop, a mental stop, or no strategy to
limit risk whatsoever?
common stock? Which choice is better—
owning shares of a company where the
management owns half of the company's
10 What is the upside on the invest-
ment, and what is the expected
timeline on that return?
Credit Suisse Securities LLC 227 W. Monroe Street, Suite 3100, Chicago, IL 60606 312.345.6828

6. Chicago, IL Leading Wealth Advisor
Credit Suisse Securities LLC
MarkC.Hutchinson,CFA®
Director—PrivateBanking
HowshouldIinvestalarge,
one-timesum ofmoney?
ByMarkC.Hutchinson
Slowly and carefully. coming into your balance sheet, and knowing that they have not fully
When coming into a large sum of make adequate provisions for any invested their funds.
money, either through inheritance taxes that might be due. Next, you For example, if based upon your
or via a monetization event, it is very should build an adequate cash bal- needs and cash-flow requirements you
important that you consider working ance, and then create a comprehensive want to invest equally in stocks and
slowly and carefully to get the funds cash-flow analysis that suits your bonds, and invest 2 percent of your
invested. It may be a one-time-only lifestyle. Only then should you begin principal to each asset class each
event. So if you make mistakes with to think about what sort of asset month, in just over a two-year period
the proceeds, a “do over” is just not allocation might work for you. you should create a fully invested port-
an option. Generally a two- to three-year time folio. Commit a total of 3 percent of
Involving your spouse, children frame is optimal for getting a large your principal each month between
and your other trusted advisors at inheritance or monetization proceeds stocks and bonds, and you should get
this time can facilitate a better dis- fully invested and diversified into fully invested in about three years.
cussion around expectations and your assets of choice. A very large By working slowly and proportion-
needs going forward. Do not do this sum might be stretched out another ately each month you can end up with
in isolation—involve and inform the couple of years. To be clear, investing the portfolio that suits your own risk-
people who matter to you so as to these funds in high-quality, short-term, and-reward characteristics. You can
have no misunderstandings. Your fixed income is not a permanent allo- agree in advance to accelerate the
children or spouse may have unreal- cation. Instead, think of it as a parking process under certain circumstances—
istic expectations that you will need space until the assets are committed but be clear to define those in advance.
to temper. Better to do that sooner to higher-return asset classes. Clearly, there are numerous ways
rather than later. In the event of a substantial and to invest a large lump sum, but you
The plan that may make sense is to prolonged rally in the stock market, do not want to jump the gun and
have your financial advisor first do a this strategy may underperform, but chase performance. Invest slowly,
thorough analysis of your current given the volatility of the last 10 years, and carefully, because remember:
financial situation, post the funds some people may find confidence There are no do overs.
Credit Suisse Securities LLC 227 W. Monroe Street, Suite 3100, Chicago, IL 60606 312.345.6828

7. W
Mark C. Hutchinson, CFA®
Director—Private Banking
Credit Suisse Securities LLC
227 W. Monroe Street, Suite 3100
Chicago, IL 60606
Tel. 312.345.6828
mark.hutchinson@credit-suisse.com
www.credit-suisse.com
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THE EVOLUTION OF FINANCIAL INTELLIGENCE
Credit Suisse Securities LLC is featured in Worth® 2012 Leading Wealth Advisors™, a special section in every edition of Worth® magazine. All persons and firms appearing in this section have
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