If you’ve spent much time on investment sites, you’ve doubtlessly heard of Fisher Investments, or at least its founder, Ken Fisher. His ads are all over the financial web. As of 2013, the firm manages approximately $65 billion in assets, and has been called the largest wealth manager in the U.S.
If you haven’t heard of him or his company — or if you have and you’ve never investigated further — here are the highlights.
Who Is Ken Fisher?
Ken Fisher is the founder of Fisher Investments. He has been a regular investment columnist for Forbes magazine since 1984. He has written 10 books, as well as research papers in the area of behavioral finance.
In 2014 he was determined to be worth $2.7 billion, and is on the 2014 Forbes 400 list of the richest Americans. Investment Advisor magazine has listed him as one of the 30 most influential people in the investment advisory business for the past 30 years.
What is Fisher Investments?
Founded in 1979, Fisher Investments is an independent, privately owned money management firm. The company currently serves more than 27,000 high net worth individuals, as well as more than 150 institutional clients. High net worth is generally defined as individuals with a net worth of at least $500,000.
The firm employs more than 1,500 people and is based in Camas, Washington, with additional offices in California, London, England, and Frankfurt, Germany. They currently offer their services to clients in several different countries.
How Does Fisher Investments Work?
As a wealth management firm, Fisher Investments manages every aspect of an individual’s investment portfolio. This includes account setup and transfers, asset allocation, and trading individual securities. They create a personalized portfolio comprised of assets from the U.S. and internationally, that includes stocks, bonds, exchange traded funds (ETFs), cash, and/or other securities.
They do not take custody of your investments. The accounts are titled in your name, and they will work with the brokerage firms and custodians you currently have.
In the process, you are assigned a dedicated personal investment counselor. The counselor will regularly review your individual situation with you and keep you advised of important developments related to your portfolio. They also provide clients with continuous education on investing, the firm’s portfolio management approach, and global markets. This information is conveyed through live seminars, quarterly reports, books, websites and more.
The website itself is a rich source of investor education, including articles, free reports, videos, and various tools. For example, the 401(k) tool is useful for anyone covered by an employer-sponsored retirement plan.
How Your Portfolio is Determined
Fisher Investments uses several factors to determine your personal portfolio, including your investment time horizon, investment objectives, cash flow requirements, outside assets (those that are not managed by Fisher), outside income, capital gains situation, and any specific personal restrictions or customizations that you require.
Once that information has been determined, the Portfolio Evaluation Group — under the guidance of the Investment Policy Committee (IPC) — will provide you with a written personal portfolio analysis and investment strategy.
Your personal investment counselor will review your situation on an ongoing basis, and help to make changes in your portfolio as your needs change. As part of the service, you will receive daily online commentary, weekly updates, comprehensive quarterly reports, and a series of investing books.
You‘ll also be invited to participate in several types of exclusive events including regional seminars, investment roundtables, Fisher Friends events, and other events.
The IPC centralizes all investment decisions for each clients account. The IPC includes four individuals who collectively bring more than 100 years of investment experience to the table.
The IPC members include:
- Ken Fisher, CEO & Co-Chief Investment Officer
- Jeff Silk, Vice Chairman & Co-Chief Investment Officer
- Bill Glaser, Executive Vice President, Portfolio Management
- Aaron Anderson, Senior Vice President, Research
Though individual and joint accounts are the main focus, Fisher Investments can also work with personal equity plans, self-invested personal pensions, funded retirement benefits arrangements, trusts (including charitable trusts), corporate accounts, open-ended investment company accounts, and generic offshore investments.
Fisher Investments Fees and Pricing
Fisher Investments does not charge any commissions, nor do they assess any hidden fees or extra service charges. Instead, Fisher Investments charges a “competitive” flat fee that is based on the size of your investments under management. The flat fee is between 1% and 1.5%, depending on the number of accounts you have and the amount under management.
For example, if you have $500,000 in multiple accounts the fee will be 1.5%. If you have $500,000 in one account, it will be $1.25%. For accounts of $5 million or more, the fee is 1%.
The only other charges that you may incur are any trading fees assessed by a third-party custodian that houses your portfolio.
At 1% to 1.5%, this makes Fisher Investments comparable to fees assessed by typical non-robo-advisor investment management companies. However this is well above fees typically charged by robo-advisers. For example, Wealthfront charges just 0.25% of assets under management, and the first $10,000 is free. Betterment charges 0.35% for balances under $10,000, 0.25% for balances between $10,000 and $100,000, and 0.15% for balances over $100,000.
- Personal money management - If you have no experience in managing investments, or if you are completely repulsed by the idea, Fisher Investments will handle it all for you.
- Use of a personal investment counselor - This is becoming increasingly rare, as the investment universe moves continually toward complete automation. Your personal investment counselor will know you by name, and will be aware of your investment situation. The company does not limit your access to your counselor, you can contact him or her anytime you have concerns.
- No commissions - On the surface, the idea of commissions seems to have to do primarily with investment expenses. But on the contrary, there’s actually a more important factor at play. When an investment manager works on a commission basis, there is a built-in incentive to “churn the account” (trade frequently) to increase fee income for the manager. Since Fisher Investments does not work on commission, you don’t need to be concerned that they will be trading your account for their own benefit. The flat fee arrangement completely protects you and your interests.
- Access to educational resources - It’s interesting that a service that will completely manage your investments for you offers such a wealth of educational resources, but that’s what you will find on the Fisher Investments website. This includes articles, free reports and online tools, such as retirement-, annuity- and 401(k)-calculators.
- High Annual Fees - We’ve already discussed that Fisher Investments flat fee is higher that what’s typically charged by robo-advisors, but it’s also substantially higher than what you will pay for no-load index funds. No-load means that the returns that you will earn on the funds will be closer to a pure play, with no commissions or fees. And though Fisher Investments might not do any worse than the general market in a market decline, the 1% - 1.5% fee will be tough to swallow when you’re already losing money.
- High Minimum Net Worth Requirement - You need a minimum of $500,000 to work with Fisher Investments, which will eliminate most investors from the service, particularly if you only want to entrust them with a minority portion of your investment portfolio.
- No Weekend Hours - Customer support is limited to Monday through Friday, from 7 am to 5 pm Pacific time. One other point on customer support: I emailed them on a Saturday, and they never responded. It’s possible that the email didn’t get through. But when I called to follow up on the email, I was very quickly connected with a highly knowledgeable consultant who addressed my questions thoroughly.
Whether or not you are better off investing your money with Fisher Investments, or going with a robo-advisor or a no-load S&P 500 index fund, is really part of the more fundamental question should you use an investment/wealth manager or not?
Fisher Investments represents an actively managed investment portfolio, which will cost more in investment fees than an index fund will. And though it does have the advantage of being able to invest in special situations during unique markets, it’s unlikely to substantially outperform index funds over the long-term.
In the absence of compelling evidence that Fisher Investments significantly outperforms the general market, we’ll give the service a rating of 2.5 stars out of 5.