Saturday, 7 December 2019

Profile of Fisher Investments

Profile of Fisher Investments
28 Nov
5:18

Fisher Investments is a fee-only registered investment advisor (RIA). The firm is headquartered in Camas, Wash., and has locations throughout the U.S. and in Europe. Fisher Investments has roughly 898 investment advisors on staff to serve its clients.

The firm manages a little over $94 billion in assets, making it one of the largest fee-only RIAs in the United States. Its focus is discretionary investment management for high net worth individuals and institutions.

All information included in this profile is accurate as of November 26th, 2019. For more information, please consult Fisher Investments website.

Assets under management: $94,107,835,606
Minimum investment: $500,000, though could be less at its discretion; $200,000 for WealthBuilder
Fee structure: A percentage of AUM, ranging from 0.28% to 1.50%, depending on account size
Headquarters: 5525 NW Fisher Creek Drive
Camas, WA 98607
800-851-8845/650-851-3334
www.fisherinvestments.com

Overview of Fisher Investments

Fisher Investments is a privately-held investment advisor. The firm launched back in 1979, when its founder, Ken Fisher, started it with just $250. Today, it has over $94 billion in assets under management (AUM). Fisher Investments has offices in Arizona, California, Colorado, Illinois, Georgia, Pennsylvania, Texas, Virginia and Washington. They also have offices in Europe and work with clients around the world.

Fisher Investments currently has 1,749 employees, 898 of whom perform investment advisory functions. In terms of expertise, Fisher Investments promotes its global investment focus as well as guidance from its Investment Policy Committee, which has more than 130 years of combined investment experience. The firm is headed by its founder, Ken Fisher, who is also the author of several best-selling financial books and is the longest running columnist in Forbes’ history.

What types of clients does Fisher Investments firm serve?

On its website, Fisher Investments states that its core business model focuses on high net worth individuals and institutions. Fisher Investments doesn’t target a specific type of investor, but rather looks for clients who can meet its account minimums and who believe in its investment philosophy (covered below).

To open an account with Fisher Investments, you typically need to invest at least $500,000. However, the firm states that, at its discretion, it may be willing to work with clients who have less. The firm also offers a WealthBuilder account that targets investors with at least $200,000 in investable assets.

Nearly half of Fisher Investments’ assets under management come from high net worth individuals. It also has 32,295 clients who are not considered high net worth individuals. The SEC defines high net worth individuals as those who have at least $750,000 invested, so it’s possible to meet Fisher Investments’ $500,000 minimum without technically being a high net worth individual.

Beyond that, Fisher Investments also manages the investments of a number of institutions, including state and municipal government entities; charitable organizations; pension and profit-sharing plans; and pooled investment vehicles. The firm’s AUM is split roughly 60/40 between individuals and institutions.

Services offered by Fisher Investments

Fisher Investments primarily focuses on providing investment and portfolio management services. The firm uses a discretionary approach to actively manage the portfolios of its clients, with the goal of reaching better returns relative to its benchmarks.

Fisher Investments states that it does not participate in formal wrap accounts, where all the management, brokerage and administrative expenses of an account are covered under one flat fee, but that it will occasionally do so depending on the client. It is not a stand-alone brokerage firm, so you can’t make trades or pick your own investment funds.

As part of setting up your account, Fisher Investments may offer a financial plan at no additional cost. This service is offered as part of the firm’s client onboarding process, and you can then decide whether you want to implement the plan.

One unique service that Fisher Investments offers is annuity conversion. Ken Fisher is known for not liking annuities as an investment, partly because they charge a surrender fee if people try to take out money ahead of schedule. If you have money invested in an annuity, Fisher Investments may be willing to pay some or all of the penalty to cancel the contract so you can invest the funds with them instead.

Here is a full list of services offered by Fisher Investments:

  • Investment advisory services/portfolio management (discretionary management; wrap fee accounts offered occasionally at its discretion)
  • Financial planning (a free financial plan offered for some clients as they prepare to invest)
    • Retirement planning
    • Trust and estate planning
    • Charitable planning
    • Cash flow forecasting
    • Spending analysis and budgeting
    • Long-term care planning
  • IRA and 401(k) rollovers
  • Quarterly reports, seminars, workshops, videos and free e-books on investing

How Fisher Investments invests your money

Fisher Investments is a discretionary investment firm that uses an active management style. Rather than selling broad portfolios that try to match an index like an S&P 500, the firm’s analysts closely study the market for opportunities to earn a higher return versus its benchmarks. The firm does so using qualitative and quantitative tools like software, computer databases and a centralized portfolio management system. Their IIC group, chaired by Ken Fisher, helps guide this research and sets the foundation of these investment strategies.

Fisher Investments does not offer just one fund to every client but instead tries to personalize investment recommendations based on a client’s goals, time horizon, cash flow needs and risk tolerance. The firm’s portfolio recommendation will be a mix of equity, income or blended funds that best fit a client’s goals.

Beyond that, Fisher Investments promotes its flexibility. The firm is not committed to just one investment approach and instead updates its recommendations based on what it sees in the market. It can adjust the types of asset classes, sectors and geographic regions represented in your portfolio depending on its predictions. If the firm is worried about a potential downturn, it takes defensive strategies to mitigate losses.

Finally, Fisher Investments takes a global approach and will consider investments beyond the United States to fit a client’s goals.

Fees Fisher Investments charges for its services

Fisher Investments makes money by charging a fee based on a percentage of assets under management. The firm deducts a percentage of your portfolio every quarter to cover this fee. The amount you owe depends on the size of your portfolio, with lower rates offered for larger portfolios. The firm also offers an additional rate discount for portfolios over $5 million that only invest in fixed-income assets, not equities. See the tables below for the firm’s current rates.

Fisher Investments typically only accepts clients with $500,000 or more in assets. However, if it takes on a client with less than $500,000, it will charge a flat 1.50% fee on the portfolio. In addition, if you sign up with $500,000 or more, but market losses push your portfolio to below $475,000, you would also owe the 1.50% fee.

Besides its asset-based fee, Fisher Investment clients may also owe fees associated with handling their investment strategy, including brokerage commissions, custodian fees and expenses from investing in exchange traded funds (ETFs) and structured notes. This money doesn’t go to Fisher Investments, but instead to the brokerage firms processing the investments.

While Fisher Investments does offer financial planning to some clients, it does not charge for this service and it’s covered by the asset-based fee charged for investment management. Finally, Fisher Investments makes a small amount of money from speaking, writing and royalties for its books and advice materials.

Equity and Blended Accounts Asset Management Fee
First $1 million 1.25%
Next $4 million 1.125%
Additional amounts over $5 million 1.00%
Income-Only Account in Excess of $5 million Asset Management Fee
First $5 million 0.75%
Next $10 million 0.50%
Next $10 million 0.43%
Next $10 million 0.38%
Next $10 million 0.38%
Next $45 million 0.28%

Fisher Investments’ highlights

  • Awards for its performance and size: The Financial Times has named Fisher Investments as a top investment advisor for the past six years. Fisher Investments is also No. 2 on the InvestmentNews’ ranking of U.S.-based, fee-only RIAs based on their assets under management, and No. 138 (out of 500) on Pensions and Investments’ list of largest money managers worldwide.
  • A customized and flexible investment approach: If you sign on with Fisher Investments, the firm will design your portfolio based on your goals and situation. It’s not just one fund for everyone. The firm also adjusts its investment approach in response to market conditions.
  • No recent disciplinary actions: Fisher Investments has not had to make any legal, civil or criminal disclosures for disciplinary issues. The firm has a clean record.
  • Guidance from high-profile investment team: Ken Fisher himself leads the IPC team, which sets the standard for investment recommendations. That team has 130 years of combined experience, and Ken Fisher is a well-known investor and financial author.
  • Educational resources provided: Fisher Investments produces quarterly investment reports, online commentary and videos and investment training books for its clients. The firm also holds seminars in more than 60 cities around the country, where you can hear from the senior management team about the market.

Fisher Investments’ downsides

  • Above-average fees that aren’t reduced much for large accounts: Fisher Investments charges a 1.25% asset-based fee on the first $1 million invested, plus whatever costs come from executing trades. This is on the higher side, as consulting company McKinsey found that advisory fees averaged 1.08% in 2017 for accounts between $1 million to $1.5 million.While Fisher slightly reduces fees for larger accounts, you need over $5 million to qualify for the lowest rate on equity and blended accounts. Even then, it’s not that competitive at 1% versus the median AUM fee of 0.5% for accounts this large, according to financial planning industry blog Kitces.
  • Minimum investment may be out of reach for some: You typically need at least $500,000 to open an account with Fisher Investments. The firm states that, in some cases, you can open for a lower amount, though it’s not guaranteed. In addition, you’d owe an even higher 1.50% fee for these smaller accounts.
  • Limited services: Fisher Investments primarily focuses on investment management services. The firm also offer some basic financial planning as part of setting up your investment account. Beyond that, though, Fisher does not offer other services like divorce planning, insurance/risk management, real estate management and brokerage services, which other firms may offer.
  • Recent controversy with Ken Fisher: In October 2019, Ken Fisher made some controversial jokes during a presentation at a conference. Upset investors have pulled out $2.7 billion in assets under management so far, according to HuffPost.

Fisher Investments disciplinary disclosures

Fisher Investments has not faced any disciplinary events or material legal events, nor has any action been taken against any management person at the firm. The firm currently has a clean disciplinary disclosure record.

When a firm registers with the SEC, it needs to report any criminal charges, regulatory actions or legal actions like liens or civil judgments that have been taken against them. These are called disclosures and must be listed on a firm’s Form ADV filed with the SEC.

Fisher Investments onboarding process

If you’re interested in working with Fisher Investments, you can contact one of its branches, call its 800 number or request a meeting through the website. The firm will then connect you with a regional vice president so you can learn more about the firm.

After the initial discussion, the firm will partner you with an investment counselor, who would become your point of contact and the person who manages your money. The investment counselor will ask you about your retirement goals, income, living expenses and any other financial points. With this information, they can put together your customized investment recommendation. If you’re happy with the recommendation, only then do you fill out the paperwork to transfer over your savings to launch the account.

Once you’re a client, Fisher Investments states that your investment advisor will meet with you to go over your portfolio and make sure it’s still appropriate. The firm also says that you are free to contact them any time with questions or concerns.

Is Fisher Investments right for you?

If you’re looking to invest at least $500,000 and want an advisor that will actively manage your portfolio, Fisher Investments could be a good choice. If you have at least $200,000, you could also try applying for the firm’s WealthBuilder account. Just know that you aren’t guaranteed to be accepted and the fee will be higher for smaller accounts. But this could be worth it to access the firm’s customized investment recommendations, flexible strategies that react to market conditions and highly-experienced team.

Regardless of account size, this extra service does come at a cost, as Fisher Investments charges above-average fees in comparison to median advisory fees. The firm’s focus is also centered on investment management, and it doesn’t offer too much variety in services, particularly when it comes to advanced financial planning. But if investment management is your top priority and you’re willing to pay a little more to get its support, Fisher Investments would be worth considering.

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David Rodeck

David Rodeck |

David Rodeck is a writer at MagnifyMoney. You can email David here

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