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Fisher's 'good year' in 2009 means more aggressive approach
August 23, 2009 — 5:05 PM UTC by Brooke Southall
Ken Fisher is hiring again and he expects to add as many as 40 employees by the end of the year.
The owner of the world’s largest RIA, Fisher Investments, says that the hiring reflects a pick-up in business this year.“Based on the best analysis we can do, we’re gaining market share in our industry which in the long term as a business is a big deal.” Fisher says. “We’re pulling in new clients at about exactly half the rate we were in the year up to June 2008, which for us was a record 12 months.
Yet the hires are still being done in modest fashion relative to past years. Revenues are still way down at Fisher compared to the first half of 2008. Fisher’s assets under management were as high as $48 billion and they now stand at around $33 billion. Fisher chaerge a fee based on assets to his clients.
“We froze hiring at the beginning of October,” he writes in an e-mail. “We’ve never frozen hiring before. We started hiring again last month. We hire all over, mostly recruiting on colleges and more from the western U.S. But we also hire from the brokerage industry and some from banking.”
He adds: “We are hiring dozens and I can’t say how successful our hiring will be as we ramp it up but we could easily hire 40 people by year-end,” he adds. “We are not hiring in all areas but selectively in areas that need it.
By “selectively” Fisher means that he is mostly hiring pre-sales phone executives and that he is not hiring any investment counselors. He has an overcapacity of investment counselors because he boosted staffing in this category last fall and winter in order to meet the needs of clients distressed by the downturn. He reassigned people on the sales staff to become investment counselors rather than making new hires
The increasing hires reflect improving conditions. “We’re having a good year this year,” he says.
Here is how Fisher describes a his good year:
“Client acquisition is down for us this year as it is for all the industry but we will still bring in several billion dollars of new high net worth client money and our institutional business will likely bring in just over $1 billion [of new assets]” he writes in the e-mail.
He adds: “If you were to compare that total on a monthly or yearly basis to, for example, the ICI reported flows for mutual fund families that would put us approximately #20 in the country. It is the same direct marketing and selling strategy as before. Our termination rate is down and low in the mid single digits bouncing around month to month but averaging about 5% which in this industry for a firm of any size is excellent.”
Earlier this week I wrote that Ken Fisher is beginning to move his giant advisory business to some wet woods in Washington from Woodside and San Mateo, Calif. This new 120-acre Fisher Investments campus in Camas, Wash. is about 10 hours of driving, a quantum meteorologicical shift and two state lines away from his sunny Silicon Valley headquarters.
Contrasting Fisher’s decision to seek a remote location with cheap land and fresh breezes, Elizabeth MacBride wrote on Friday about how Ric Adelman is opening six branch offices in the New York metro area. His model of generating leads with seminars and radio shows depends on putting offices close to people who like his investing approach. New York’s density, affluence and proximity to his headquarters outside Washington DC make it a natural target for him.
Elizabeth will write next week about how Edelman and Fisher may have more in common than it might appear. But there are some distinctions that help explain why Fisher has grown nearly 10 times bigger.
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