Fisher Investments is a large investment management firm founded by Ken Fisher, managing over $100 billion in client assets. They have offices around the world, including one in Madison, Wisconsin that serves local clients. However, Fisher has come under scrutiny in recent years for their high advisory fees and lack of fee transparency. In this article, we’ll analyze Fisher’s fee structure, common complaints from Madison clients, and whether the fees are justified given their investment performance.
Fisher’s tiered fee schedule based on assets under management
Fisher Investments charges a tiered fee schedule based on assets under management (AUM). For the first $1 million in AUM, clients pay 1.5%. This fee tier declines as assets grow, down to 0.65% for assets over $50 million. This is higher than the industry average of around 1% for AUM-based fees. Fisher justifies the premium based on their research capabilities and pedigree of founder Ken Fisher. However, many Madison clients feel the fees are excessive, especially on larger portfolios.
Lack of fee customization or flexibility for clients
Unlike many RIAs that will negotiate fees or offer fee breaks, Fisher Investments does not customize their fee schedule for individual clients. The fees are non-negotiable. Many Madison clients have complained they cannot get Fisher to lower fees, even for large accounts or portfolios that require less maintenance. Fisher’s rationale is that their research platform and management justify the standard fee tiers. However, clients paying 0.65% on a $50 million portfolio may balk at the $325,000 annual advisory fee.
Underperformance hurting justification of high fees
The main justification Fisher provides for above-average fees is their pedigree and research capabilities. However, Fisher’s investment performance has been mediocre to poor over the past 5-10 years compared to benchmarks. The S&P 500 has significantly outperformed Fisher’s equity offerings, raising further objections around paying high fees for subpar returns. Many Madison clients accuse Fisher of focusing more on accumulating AUM rather than investment results.
Lack of transparency around what fees cover
Fisher does a poor job explaining what client fees cover. They tout their research platform, but don’t clarify how this benefits each client’s portfolio. Fees may cover fancy corporate offices and overpaid executives rather than enhancing returns. Fisher’s reports and statements provide little insight into where clients’ money is going. For the high fees charged, Madison clients expect much greater transparency around how fees are allocated.
In summary, Fisher Investments charges above-average advisory fees with little flexibility or transparency for clients. Their mediocre investment performance further undermines justifying the high fees Fisher commands, resulting in growing client complaints, especially from the Madison office. Fisher would be wise to re-evaluate their fee structure and communication to better align with client expectations.