Welcome to the 2024 Fisher Investments Review, where we take a deep dive into the financial landscape to provide you with insight into the performance and strategies of one of the leading investment management firms.
As markets evolve, Fisher Investments continues to be a key player in navigating the complexities of the global economy.
In this comprehensive review, we will analyze their investment approach, portfolio management and overall market outlook in the context of the current economic climate.
With a commitment to providing tailored investment solutions, Fisher Investments has attracted attention for its unique perspective and adaptive strategies.
Join us to explore the firm’s performance, innovations and contributions to the ever-changing world of finance in this comprehensive review for the year 2024.
What is Fisher Investments?
Founded by Ken Fisher in 1979, Fisher Investments is a trailblazer in investment theory. For over 30 years, Ken Fisher contributed his insights via the Portfolio Strategist column in Forbes.
Even after four decades, the company maintains its original objective: assisting clients in achieving their investment goals through personalized solutions, meticulous care, and transparent fee structures.
While the firm extends some 401(k) solutions and cooperates with institutional investors, its primary focus remains on serving private clients.
Fisher Investments is distinguished for its customized asset allocations and dynamic approach to money management.
It crafts distinctive investment blends for each client, frequently adjusting portfolios based on the firm’s ever-evolving market prospects.
Being a fee-only firm, Fisher Investments solely generates revenue by charging a percentage fee on managed assets, emphasizing its commitment to fiduciary responsibility and consistently prioritizing clients’ best interests.
How does Fisher Investments work?
How does Fisher Investments operate? Here’s an overview of the process, covering the target clients, the new client onboarding, the company’s investment philosophy, and the fee structure.
Fisher Investments requires a minimum of $500,000 in investable assets, including funds in brokerage, retirement, or cash accounts.
The firm caters to high-net-worth individuals, especially those approaching retirement, seeking clients aligned with its long-term, goal-oriented investing philosophy.
For high earners, Fisher offers WealthBuilder accounts with a $200,000 minimum, subject to case-by-case approval.
New Client Onboarding
New clients engage with their assigned Investment Counselor, either in-person or online, considering Fischer’s presence across several U.S. states and a few global offices.
The counsellor comprehensively assesses the client’s financial position, facilitates the setup of an account with a custodian (like Schwab or Fidelity), proposes an asset allocation, and assists in its implementation.
This client-centric approach ensures tailor-made financial solutions aligned with Fisher’s investment strategies.
Fisher Investments offers three key elements to its clients:
Fisher begins by assessing each client’s current financial situation and aspirations, providing a tailored approach to meeting individual goals.
The firm designs the portfolio based on factors like age, risk tolerance, current financial needs and future objectives. These portfolios contain a mix of stocks, bonds, or other securities.
Active Asset Management
Unlike some fee-only advisors, Fisher takes an active approach to market management. Its Investment Policy Committee (IPC) continuously monitors economic conditions and market sentiment, formulates new investment strategies and updates existing ones.
For example, if the IPC identifies undervalued international equities, it may adjust growth strategies to emphasize non-US stocks.
The decision to choose Fisher Investments depends on confidence in its IPC. Notably, the company does not publicly disclose the returns on its strategies, which underlines the importance of confidence in the firm’s dynamic and responsive investment approach.
Fisher Investments employs a fee structure based on the total assets under its management. In addition to this, the company applies a pass-through commission of $7-$10 per trade, directed to its brokerage.
The fees vary between 1% and 1.5%, contingent on the size of the client’s account. For example, clients with less than $500,000 face a 1.5% charge, gradually decreasing as the account approaches $5 million.
While these fees slightly exceed the industry average, they reflect Fischer’s proactive approach to money management.
Some clients find the elevated costs justified for the exposure to Fisher’s active management, whereas others may question the above-average expenditures.
Notably, Fisher Investments operates as a fee-only advisor, earning revenue based solely on the value of managed assets.
This model eliminates potential conflicts of interest seen in advisers who earn both fees and commissions from specific investment products, ensuring a focus on aligning with clients’ objectives.
Whether choosing Fisher Investments or another firm, opting for a fee-only financial advisor is vital to maintaining transparency and avoiding potential conflicts of interest.
Why I Don’t Recommend Fisher Investments
As a former financial advisor, I am hesitant to recommend Fisher Investments to most individuals, despite acknowledging its strengths. Here’s a brief breakdown of the pros and cons:
Pros: Fee-only consulting, strong reputation, experienced advisory team.
Cons: Misaligned business model and a subpar new customer experience.
In my assessment, the drawbacks outweigh the benefits, elaborated below.
I find Fisher Investments’ structure problematic, coupled with what I perceive as deceptive marketing. The firm operates at the crossroads of a product creator, with the IPC actively managing investment strategies, and a financial advisor.
Fund managers typically produce mass-market products, often seen in TV ads. In contrast, genuine financial advisors offer highly personalized services that are challenging to scale.
Combining the two creates a discrepancy
Fisher charges financial advisor fees (1.5%) while marketing like a fund manager, a sector that typically does not command such high fees. Noteworthy, some high-quality fund managers with similar strategies charge less than 1%, if not significantly lower.
While this model has proven highly profitable for Ken Fisher, the world’s wealthiest financial advisor with a net worth exceeding $8.1 billion, it may disappoint those seeking comprehensive advisory services beyond mere investment recommendations. Understanding this misalignment is vital before committing to Fisher Investments.
New Client Experience
Upon joining Fisher Investments as a new client, individuals are assigned an Investment Counselor, a process that, in my perspective, appears counterintuitive.
Opting for a financial advisor should involve choosing someone you genuinely like and trust. Ideally, prospective clients should conduct multiple face-to-face interviews before making a decision — a practice not emphasized at Fisher.
While it’s possible to request a new Counselor, it misses the essence of the issue. Instead of emphasizing the importance of choosing a financial adviser tailored to individual preferences, the focus seems to be on selling the brand.
True financial advisors should possess a deep understanding of their clients, care about their unique circumstances and offer personalized recommendations.
Despite Fisher’s claim of avoiding “cookie-cutter portfolios,” the advice provided appears less customized and holistic compared to what a local financial advisor might offer.
However, if one believes strongly in Ken Fisher and the Investment Policy Committee (IPC), and is confident in the anticipated performance justifying the fees, it’s worth noting that over 135,000 individuals share the same sentiment.
Three Alternatives to Fisher Investments
Here are three recommended alternatives to Fisher Investments:
A candid financial advisor will acknowledge that there’s little they do that you can’t manage on your own. All it takes is information and a willingness to learn, coupled with discipline.
If you possess these qualities, I recommend acquiring the skills to manage your finances independently, avoiding the fees associated with financial advisors.
Various books, articles, videos, and resources are available for planning and managing your retirement, often costing significantly less than the 1%+ charged by financial advisors.
While 1% may seem trivial, on a $500,000 portfolio, it amounts to $5,000 annually, not to mention the potentially higher cost of lost compound interest.
Managing your finances is a high-return skill worth learning. For insights into my investing approach, check out The Barbell Investor.
To track your assets, returns, and net value, consider using a free or paid portfolio tracker. Empower’s free Financial Dashboard is an example, allowing you to aggregate your net value and efficiently manage all your investments in one place.
Empower also offers additional tools like a Retirement Calculator and Investment Checkup, all available at no cost.
While I strongly advocate for self-guided online investing, there are compelling reasons to opt for a financial advisor:
If you lack the interest or time to learn money management, a skilled financial advisor offers the valuable convenience, of handling your investments effectively.
Despite the accessibility of learning, receiving regular advice on various financial aspects, including estate planning, tax planning, insurance, and charitable giving, can be infinitely beneficial. A financial advisor provides comprehensive insights into your financial life.
Many investors underperform the market due to impulsive decisions. A financial advisor serves as a vital emotional buffer, preventing hasty actions in response to market fluctuations. This emotional restriction can often outweigh the fees charged by advisors.
When choosing a financial advisor, prioritize those who operate on a fee-only basis. Beyond that, find someone you trust and connect with individually. While I recommend a local advisor for in-person meetings, this choice is subjective.
Robo-advisors are algorithmic tools that construct portfolios based on your age, investment horizon, and future goals. They offer a praiseworthy 85% or more performance compared to traditional financial advisors, typically at much lower fees, ranging between 0.25–0.50%.
The caveat is that robo-advisors excel at portfolio design but cannot provide personal financial advice tailored to your specific situation, including tax planning, estate planning, or insurance recommendations.
For younger individuals wanting a hands-off approach, robo-advisors like Betterment could be ideal. However, those with a larger net worth or approaching retirement may find the personalized services of a financial advisor more suitable.
The Fisher Investments Review of 2024 reveals a firm with a longstanding reputation, employing a proactive investing philosophy. While offering personalized services and experienced advisory teams, it faces criticism for a misaligned business model and a less-than-ideal new customer experience.
The fee structure, though slightly above industry averages, reflects a commitment to active money management. Potential investors must weigh the advantages of Fisher’s approach against the higher costs.
As with any investment decision, individual preferences, confidence in the Investment Policy Committee, and alignment with Fisher’s strategies will ultimately guide the choice of engaging with this prominent investment management firm.
What is Fisher Investments’ minimum investment requirement?
Fisher Investments has a minimum requirement of $500,000 in investable assets, encompassing funds in brokerage, retirement, or cash accounts.
How does Fisher Investments charge fees?
Fisher Investments charges a fee based on the total amount of assets it manages on behalf of clients, ranging from 1% to 1.5% depending on the size of the account. Additionally, there is a pass-through commission of $7-$10 per trade.
Is Fisher Investments a fee-only advisor?
Yes, Fisher Investments operates as a fee-only advisor, generating revenue solely based on the value of managed assets. This model eliminates potential conflicts of interest.
What distinguishes Fisher Investments’ investment philosophy?
Fisher Investments employs a personalized approach, creating tailored portfolios based on factors like age, risk tolerance, and future objectives. The firm’s Investment Policy Committee (IPC) actively manages strategies, adapting to evolving market conditions.
Can new clients request a different Investment Counselor at Fisher Investments?
While it’s possible to request a new Investment Counselor, the emphasis at Fisher seems more on selling the brand than on selecting a personalized financial advisor. Clients are encouraged to evaluate their preferences before committing to Fisher’s approach.