Fisher Investments is a large US-based investment adviser managing over $197 billion in assets. They are known for their personalized portfolio management services tailored to meet client goals. However, Fisher Investments fees have come under scrutiny due to their complex fee structure. This article takes a closer look at the typical fees charged by Fisher Investments.
Asset-Based Fee Structure at Fisher Investments
Fisher Investments charges an asset-based fee rather than commissions. This means clients pay a percentage fee based on total assets under management rather than per trade. The standard tiered fee schedule is:
– 1.5% on first $1 million
– 1.25% on next $2 million ($1M – $3M)
– 1.125% on next $2 million ($3M – $5M)
– 1% on assets above $5 million
The more assets clients have invested, the lower the marginal fee. While asset-based fees avoid commission conflicts, the dollar amounts can be high for larger portfolios. Critics argue the fees collected are excessive for the basic asset allocation strategies employed.
Other Fees to Watch Out For
In addition to the asset-based fee, Fisher Investments clients may face other charges:
– Trading costs – clients reimburse Fisher for trading expenses incurred
– Custody fees – charged by third party custodians, typically 0.1% of assets
– Account administrative fees – costs for account reporting and maintenance
While trading and custody fees are common in the industry, administrative fees are less typical and act to further increase total costs. Fisher’s complex web of fees makes it difficult for clients to calculate the all-in costs.
Fee Criticism and Lawsuits
Fisher Investments fee schedule has attracted criticism, regulatory fines, and lawsuits over the years. Concerns include:
– Lack of fee transparency – complex layered fees make total costs unclear
– Excessive fees given passive strategies employed
– Over-trading to drive up commissions
– Failure to disclose trading cost reimbursements and admin fees
While Fisher denies wrongdoing, they have paid millions in fines and settlements over fee and disclosure issues.
The Fisher Investments fee schedule utilizes a tiered asset-based structure that decreases at higher asset levels. However, additional trading, custody and administrative fees can substantially increase total costs. Lack of transparency around the all-in fees and accusations of overcharging have resulted in regulatory actions and lawsuits.