If you’re a high net worth investor looking for customized investment management, Fisher Investments should be on your short list of choices.
The company already manages well over $100 billion for more than 60,000 clients, so you know they must be doing something right.
And that something is designing and managing custom portfolios that match your investor profile and investment goals.
Fisher Investments shouldn’t be compared with robo-advisors, as it represents a completely different service. Rather than trying to match the performance of the financial markets, which is the common strategy of robo-advisors, Fisher Investments works to outperform it.
They do this through a combination of investment strategies that make generous use of human intervention. For example, they may increase your allocation in a rising market sector, and decrease it in one that’s falling.
In today’s world of automated investment services, that kind of hands-on management is becoming increasingly rare. But it may be absolutely necessary if you have a larger portfolio that needs special handling.
You’ll pay more for Fisher Investments than you will for typical robo-advisors, but then they provide a much higher level of service than the robos do.
Just be aware that Fisher Investments caters to “high net worth individuals”. They define that as a liquid net worth of at least $500,000.
But if you qualify, this may be the right investment service for you.
Account Minimum: $500,000
Fees: 1% and 1.5%
Promotion: Free 15-Minute Retirement Plan
What is Fisher Investments?
Based in Camas, Washington, Fisher Investments was launched back in 1979, by founder, executive chairman and co-chief investment officer, Ken Fisher.
The company has since grown to have $112 billion under management for 60,000 high net worth individuals and more than 175 large institutions. The company operates as an independent, fee-only investment advisor.
Fisher Investments maintains four main business units:
- Fisher Investments Institutional Group
- Fisher Investments Private Client Group
- Fisher Investments 401(k) Solutions Group
- Fisher Investments International Group
Fisher Investments uses a flexible investment approach, adjusting their investment strategy based on what they believe will be the future direction of the financial markets.
And unlike so many other investment services, they also invest heavily outside the US.
The company charges a fee based on the portfolio they manage for you, similar to robo-advisors.
Fisher Investments does not earn commissions on trades, removing any incentive to buy and sell securities for the primary purpose of generating additional income.
But unlike robo-advisors, Fisher Investments gives you regular access to account executives, who will frequently contact you directly with information and updates on your portfolio.
Founder Ken Fisher is a respected figure in the investment community. He was a regular investment columnist at Forbes magazine for more than 30 years, and has written 11 books on the subject of investing.
According to Forbes, he has a current net worth estimated at $4 billion. That’s even more impressive when you consider he began Fisher Investments with a personal investment of just $250!
The company has more than 3,000 employees, and investments are managed by an investment committee (the Fisher Investments Investment Policy Committee), which includes Ken Fisher himself.
Fisher Investments Investment Methodology
Fisher Investments is an investment advisory service for high net worth individuals, defined as those with a minimum financial net worth of at least $500,000.
They generally favor clients who will have at least $500,000 under management with the company, but may accept those with as little as $200,000 on a case-by-case basis.
Fisher Investments is not a broker dealer, and does not take possession of your financial assets.
Instead, your funds are held with nationally recognized brokerage funds, who act as custodians. Fisher Investments will have limited power of attorney to place trades on your behalf.
Much like robo-advisors and other investment advisory services, Fisher Investments starts by determining your investor profile.
This will include assessing your risk tolerance, investment goals, investment time horizon, cash flow requirements, as well as assets held outside your managed portfolio.
Based on that information, they’ll create a customized portfolio.
Fisher Investments operates as a traditional human guided investment advisory service. That means they provide a service level exceeding that offered by robo-advisors.
You’ll have a dedicated personal investment counselor who will regularly review your portfolio, and keep you aware how it’s being managed.
It will also be an opportunity for you to disclose any changes in your life or finances that may require an adjustment in your investments.
Fisher Investments is an actively managed investment service. Rather than investing in index-based funds that merely track the market, Fisher Investments actively works to outperform it. I
In that way, Fisher Investments will adjust your portfolio based on market conditions. If trends favor stocks, your stock allocation will be increased. If they favor bonds, your bond position will be increased.
Your portfolio will also be adjusted for opportunities in specific countries or industry sectors. For example, if investment opportunities in an industry sector or particular country look favorable, your allocation in those investments will be increased.
They’ll also look to include dissimilar securities to moderate the risk in your portfolio.
Your portfolio will be invested in a mix of US and foreign stocks, bonds, and exchange traded funds.
Top Down Investing
There are two common methods of investing, Top Down and Bottom Up. Bottom Up emphasizes individual security selection, rather than portfolio target allocations.
Fisher Investments uses the Top Down approach. It emphasizes allocation and selection of assets based on macroeconomic characteristics and how they affect the market. Security selection follows that allocation.
Their basic approach to Top Down investing is based on a “70/20/10” model, in which 70% of investment returns are the result of asset allocation, 20% to category decisions, and only 10% to the selection of individual securities.
Fisher Investments Approach to Retirement Planning
One of the areas where Fisher Investments excels is with retirement planning. It’s a fundamental part of their investing strategy, and they use a holistic approach.
They specifically discuss your retirement plans with you when you begin investing, then build a personalized portfolio that will best move you in that direction.
Your retirement situation is reviewed regularly, and adjustments are made as retirement plans change.
Fisher Investments also provides news and market analysis to keep you in the loop. They even offer retirement planning advice and education to help you better understand the process.
Though they don’t take direct management control of your employer-sponsored retirement plans, they do include them in the investment mix.
They can make recommendations to help you better manage those accounts, while providing direct management of self-directed accounts, like the various types of IRAs.
To help you with the retirement planning process, they offer a Retirement Planning Calculator, which can help you to determine how much income you’ll have in retirement based on your current investing patterns.
Fisher Investments provides several free guides to help you better prepare for retirement, including guides addressing:
You’ll also have access to a large number of retirement videos and articles that will provide a wealth of retirement related information.
The 15-Minute Retirement Plan
This is a special guide Fisher Investments makes available to anyone, free of charge.
They bill it as providing “4 Ways to Avoid Running Out of Money in Retirement”, which addresses what may be the single biggest concern most people have about retirement.
The 15-Minute Retirement Plan addresses four critical retirement questions:
Fisher Investments Investment Tools
In addition to the Retirement Calculator and the 15-Minute Retirement Plan, Fisher Investments offers several calculators to help you crunch the numbers on your investments.
For example, the 401(k) Calculator not only shows you future values of your plan based on your current contributions and investment returns, but it can also show you how making small changes can affect your plan’s future value.
It’s a tool that will give you an opportunity to make important changes that will better enable you to reach your retirement goals.
The Future Value Calculator will calculate the future value of any investment you hold or plan to acquire.
There’s also the Annuity Calculator that will show you the future value of an annuity contract. Annuities aren’t particularly popular, and they do have their flaws from an investment standpoint.
But they can be an excellent way to create a predictable income source during the retirement years, particularly for anyone who won’t have the benefit of a pension. The calculator can help you determine if an annuity will make sense for you.
Speaking of annuities, Fisher Investments has an entire website section dedicated to these investment contracts.
Topics include understanding annuities, pros and cons of annuities, about variable annuities, annuity guides, and fixed annuity information.
Fisher Investments Fees and Pricing
Though you do need to have a minimum liquid asset base of $500,000 to work with Fisher Investments, they will sometimes accept management of a portfolio as low as $200,000.
The fee structure is based on the amount of assets you actually have under management with the company.
There are two fee schedules, one for Equity and Blended Accounts, and another for Income Only Accounts in Excess of $5 million.
The fee schedule for each is as follows:
Equity and Blended Accounts
Below $500,000, 1.50%
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
First $5 million, 0.75%
Next $10 million, 0.50%
Next $10 million, 0.43%
Next $10 million, 0.38%
Next $10 million, 0.33%
Next $45 million, 0.28%
Though these fees are considerably higher than what are typically charged by popular robo-advisors (who charge between 0.25% and 0.50%), they’re in line with those charged by traditional human investment advisors.
What’s more, Fisher Investments provides customized active investment management, as well as generous advisor support, that is not available with robo-advisors.
It’s a higher level of service, which means that the comparison with robo-advisors isn’t a valid one.
Pros & Cons
- Fisher Investments provides hands-on investment management, designing a custom portfolio based on your own investor profile and preferences.
- The tiered percentage management fee is all-inclusive. It also prevents the service from “churning” your account to generate additional fees.
- The company does not take possession of your investments. Instead, they are held in a major brokerage account owned by you, but managed by Fisher Investments.
- Fisher Investments provides a strong retirement orientation in their investment strategy. This is the major long-term financial goal for most investors and it’s a company specialization.
- You’ll enjoy regular contact with your investment counselor.
- You can provide updated information on your finances and major life changes that will enable your portfolio to be adjusted accordingly.
- The web platform offers a wide variety of free investment tools and educational resources, even if you don’t sign up for the service.
- The $500,000 minimum investment net worth will exclude small and medium-size investors.
- Fisher Investments’ fee structure is several times higher than what’s typical fee charged by most robo advisors, though it is in line with fees charged by traditional human investment advisors.
- Since Fisher Investments creates custom portfolios, it doesn’t provide published investment results as a guide to what you can expect for returns on your investments.
Should You Invest with Fisher Investments?
Once again, it’s important to remember that Fisher Investments works with high net worth individuals. You’ll need to have a minimum of $500,000 in liquid net worth to be eligible to use the service.
And though they prefer you to have a minimum of $500,000 in assets under management with the company, they may go as low as $200,000 in certain circumstances.
If you’re looking for an investment manager that will provide a custom portfolio based on your personal investor profile and preferences, Fisher Investments can be that service.
They’ll consider your current financial situation, your investment goals, time horizon, future cash flow needs, and your risk tolerance, in constructing a portfolio that will work best for you.
You can even make adjustments along the way. And once they create a portfolio, they’ll provide full management going forward, much the same way robo advisors do.
The service is also an outstanding choice for anyone with a strong focus on retirement planning. Fisher Investments sees retirement planning as an integral part of the service they provide.
Not only do they offer special retirement investment strategies, but they also provide a wealth of tools and resources to educate you about the process and how they’re managing your money.
For many investors, the main obstacle with Fisher Investments will be the fee structure. In a world of automated online investment platforms that charge minimal fees, Fisher Investments’ fee structure is more comparable to traditional human investment advisors.
But that’s because they provide a higher level of service than robo advisors. They don’t simply try to match the performance of the underlying markets, the way robo-advisors do, but to outperform it.
And you’ll have regular access to your dedicated investment counselor at every step of the process.
Fisher Investments is an excellent choice for a high net worth individual, who lacks either the time or the inclination to manage his or her own investments. If that describes you, Fisher Investments is definitely worth a closer look.
If you’d like more information, or you’d like to sign up for the investment service, check out the Fisher Investments website. We suspect you’ll be glad you did!
Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He and his wife are “empty nesters” living in New Hampshire.