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Fisher Investments Losses FAQ

What is Fisher Investments?

Fisher Investments is a financial firm founded in 1970 and based in California. It is run by CEO Ken Fisher, who is also a columnist for Forbes Magazine. Fisher Investments serves individual investors and institutional investors. According to the company website (fisherinvestments.com), Fisher Investments manages the investments of more than 20,000 private clients.

What are the Fisher Investments complaints?

Client complaints about Fisher Investments involve two separate but related concerns. The first relates more to misrepresentation. Clients allege they were promised by Fisher that their Fisher Investments portfolio would be tailored to their individual needs, taking into account their financial situation and risk tolerance. Clients allege, however, that most—if not all—clients have accounts that are made up almost entirely of equities (i.e., stocks). By having accounts that are almost entirely invested in stocks (some clients allege their account was 100 percent in equities)—as opposed to having accounts in which the asset allocation is appropriately diversified between equity, fixed income and cash/cash equivalents—Fisher Investments was allegedly not tailoring accounts to an individual's needs.

The second portion of the complaint is that for some individuals, an account that is 100 percent (or almost 100 percent) equities is simply too risky. For example, investors who are at or near retirement age may rely on their investment to provide money to live off. If they happen to open their account at the start of a volatile market period, they could lose a lot of money without any time to regain their losses. This could have a devastating impact on their finances and on their life.

What's wrong with having an all-equities Fisher Investments portfolio?

All-equities portfolios can be risky. A portfolio that is heavily or entirely invested in the stock market will rely solely on stock market performance for its return on investment. In a "down" market or bear market, chances are the portfolio will suffer losses to a much greater degree than if the portfolio had been more diversified by allocating assets between stocks, fixed income assets (bonds) and cash or cash equivalents.

For younger investors, there is still a risk to an all-equities portfolio, although they may have time to recover their losses. For individuals who are at or near retirement age, however, there may not be enough time to recover massive financial losses. They simply may not be able to afford the downside of a volatile all-stock portfolio. Portfolios that include non-stock investments (such as bonds) tend not to have the dramatic fluctuations in value as those that are all-stock portfolios.

According to one attorney, a general guideline is that the percentage of a person's account put in non-stock investments should be approximately equal to the person's age. For example, a 70-year-old should have 70 percent of his investment in non-stock investments and no more than 30 percent of the portfolio in stocks. For a person who is 40 years old, the split can be different—40 percent in non-stock investments and 60 percent in stocks. (Please note: This is not a formal rule that must be followed but is a useful guideline.)

Have there been any lawsuits or arbitrations filed against Fisher Investments?

Yes. Sharyn Silverstein, a former Fisher Investments client, filed an arbitration with JAMS arbitration alleging she was promised a portfolio tailored to her individual needs but was then given an account that was 100 percent based in equities benchmarked to the MSCI World Index. Silverstein argued that the investment strategy was not suited to her nor was it requested by her. As a result of her investments, Silverstein claimed she lost approximately $300,000.

What was the finding in that Fisher Investments arbitration?

Karen Willcutts, the JAMS arbitrator involved in the hearing, found in favor of Silverstein, awarding her $300,000. In her decision, the arbitrator wrote, "Fisher failed to make reasonable inquiry into [plaintiff's] financial situation, investment experience, and investment objectives or ignored that information." She went on to note that Fisher gave Silverstein the same recommendation that it did to the vast majority of its clients, 100 percent equities.

Why can't I file a Fisher Investments lawsuit?

As with many other financial firms, Fisher Investments may have a signed pre-dispute arbitration clause that clients must sign before opening an account. That clause requires investors to file an arbitration rather than a lawsuit if a dispute over the account should occur.

How can I tell if I have a Fisher Investments complaint?

If you invested with Fisher Investments, you should receive a monthly or quarterly statement that indicates what portion of your portfolio is in stocks. If your account is too heavily invested in stocks or equities for your financial situation and risk tolerance, you may be eligible to file a claim against Fisher Investments.