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Ken Fisher keeps expanding his $42 billion RIA empire despite UHNW head winds

The big West Coast money manager discusses his growing institutional arm, his biggest competition and his unorthodox management style

Thursday, March 1, 2012 – 4:29 AM by Steve Garmhausen
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Ken Fisher: On the high-net-worth side funding levels are tough.

Name: Ken Fisher, chairman, CEO
Firm: Fisher Investments
Headquarters: Woodside, Calif.
AUM: $42 billion
Years in business: 33

I don’t know of many bosses who would build their employees out-of-state offices to help them avoid problems like traffic congestion, high taxes, expensive housing and bad schools. But Ken Fisher, head of a $42 billion RIA — one of the biggest in the country — does things differently. See: The world’s largest RIA takes the cult-on-the-hill to the Washington state woods.

In 2009, Fisher, whose 33-year-old firm is based in Woodside, Calif., broke ground on a second campus in Camas, Wash. Three years later more than a third of the firm’s 1,250 employees now work at the new building and the company is making room for more. With the first building complete, the foundation has been laid for another one like it; that’s in addition to a 30,000-square-foot IT center that’s currently under construction. See: Capitalizing on 'unintended consequences’ of DOL changes, Ken Fisher pounces on a fat-margin 401(k) opportunity.

I spoke with Fisher, head of FIsher Investments and a longtime Forbes columnist, about this ongoing ambitious project. We also discussed his business model, and whether Skype might fit into his famously phone-centric approach.

Why are you building the Washington offices?

California is a very expensive place, and in various ways it’s becoming much more onerous for employees. In the state of Washington there all kinds of good things employees benefit from that they don’t get in California. I’m not going to suggest Washington’s the very best place in the world, but we canvassed lots and lots of places and [decided] that it’s a really good place to put our employees that would like to have an alternative to California. It’s in a location that provides easy transportation from California; literally the facility is 20 minutes from the gate at Portland Airport.

We don’t force anyone to go to Washington; this is all aimed at creating a better environment for employees.

Will the company eventually be based in Washington?

People always ask that question as if we have a presumed outcome, and we don’t.

Do you see Ken Fisher eventually moving to Washington?

Not particularly, but I wouldn’t say it’s impossible. I’ve been lucky in life; I can afford to overcome the dilemmas many young people in the workforce can’t overcome.

I also have personal reasons to be in California, and you could ordain that as the “grandfather tax.” Many of the reasons someone puts up with California’s features are tied to things like family and those types of issues. We all have our own personal features; I have a very long, non-work-related emotional relationship with things related to redwood trees, and I put a lot of my life into things related to redwood trees.

Fisher is a fast speaker to begin with, but when the subject of his relationship with redwood trees came up, he was really off to the races. Suffice to say that Fisher is a giant in the world of giant trees. In 2006, he established the Kenneth L. Fisher Chair in Redwood Forest Ecology at his alma mater, Humboldt State University in Arcata, Calif. — the first endowed chair at HSU, and the only one in the world focused on a single tree species. More on that here.

How are asset levels and inflows these days?

On the high-net-worth side funding levels are tough. We’re funding net a few hundred million a month in the U.S. and something like 15 million pounds in Britain and something like 7 euros in Germany, and people are still reacting to concerns and fears, all the things they read about in 2011. That caused them be fearful. Our activity levels are high; effectively you’re building a pipeline of people who are agitated and fearful, but they’re also hesitant to get off the dime.

What we’re often known for is our high-net-worth business. Then the other part that we’re typically less seen for is our institutional piece, which is about $13 billion of our of our AUM. And in the last couple of years, it’s done better than high net worth, and it’s increased a little as a percentage. it’s now in the range of 38% [of our AUM].

Your client relationships are mostly handled over the phone rather than face to face. Why are your clients, for whom you’re managing a lot of wealth, OK with this?

If [our clients] really want to see someone face to face, they can. They just mostly don’t. Clients that in their heart need face to face on an ongoing basis probably decide not to move in our direction. I think people in our industry way overemphasize how much clients and prospects want to have that face to face. For the most part a lot of our clients want to be able to call in whenever they want, and they don’t want to have to set up a meeting. A lot of them see having some face to face where some person blows smoke at them is actually a negative. They want to call in … when they’ve got a bean on about something and they want deal with it right then.

One of the problems, in our opinion, with many advisors is that some of them are so dependent on their ability to do face to faces. They’ve got themselves stretched too thin to deal with problems at critical times, which is when they’re of the most value to a client.

Have you considered using Skype with clients?

For now we’ve ruled it out. My views on these subjects are overridden by my concerns that we do not do anything which regulators may seem hostile to it. I think there’s potential for these relationships via Skype, but I’d like to see what in my opinion is some clarity on usage from regulators before we’d dive in to such things.

One of my primary goals is that I’ve never had and never will have a problem with any of my major regulators; I will bend over backward to do anything to make sure I don’t have problems with my regulators.

Where do you have assets under custody?

One the institutional side pretty much all the major institutions have their own major custodians, and we’re basically linked onto whoever the custodian is. Mostly these are the same institutional custodians everyone else uses. On the high-net-worth side, we use a handful of traditional broker-dealers. It’s been true for a long time that Schwab was the biggest, and it used to be true that we were Schwab’s biggest single customer. Other major custodians are mostly the big national wirehouse brokerages: Smith Barney, UBS, Merrill, Fidelity …

Has your hiring picked up?

Yes. We added something around 175 in 2011. It was pretty much across the board, a little more in institutional than high net worth. See: Ken Fisher resumes hiring but still has 'overcapacity’ of investment counselors.

We spend a fair amount of time—not for everybody, but for many more than not—rotating people from one area to other areas of the firm. A goal of the rotation is to build breadth beyond depth into our employee base. For an awful lot of our areas, we don’t want someone too siloed in an area where they lose the perception of what the totality of everything is about.

Do you use proprietary technology or do you outsource to the big providers that are popping up?

We have long farmed them out. We do have proprietary technology in relation to trading and portfolio management that we built in-house. But traditional portfolio accounting and fee billing and CRM and things like that, those kinds of functions are all farmed out. Trying to invent that wheel ourselves is not something where we have a proprietary advantage. Our vendors are not so broadly used in the industry; they have customized stuff for us. I don’t think there is anything you do at that level, the way the industry is today, that makes or breaks you. You play to not lose that game, you don’t play to win.

Who’s your competition?

We can track where the funds come from and go to when they leave us, and the biggest single place is the major broker-dealers. Why? Because that’s where the biggest piece of the assets are being handled anyway. Then on the other hand, we’re going to be up against almost anybody. Sometimes we might be competing with an independent RIA with $60 million of AUM, and 100 clients.

Have you ever considered trying some brick-and-mortar branches?

Of course I’ve considered it, and I would consider it again. But I don’t anticipate so doing, or we’d be doing it. I don’t think brick and mortar gives you some tremendous advantage.

In the brokerage world, there’s Edward Jones, which has had a very impressive history of being in tiny-town America. I’m very impressed with how Edward Jones has done as a business model; I think it’s one of the under-told stories of modern financial times. The nature of our industry, in part, is that people excel by differentiation, and in my view there are so many folks trying to be eyeball-to-eyeball, belly-to-belly at a customer-service level, I’m not so sure that is particularly advantageous.

What does Fisher Investments, already hugely successful, aspire to?

I kind of see us as a big niche player doing a lot of different things, and differentiation is important to that. I’d never try to compete head-on with major players in their strengths because I’m a youngest brother and I learned not to do that when I was a little boy.

A lot of what we do are not what [clients] would typically get from most other places, and the customer that comes to us likes those things. For example, we tend to enlist clients who are really looking off in a different direction, for a total global approach. We typically have a higher non-U.S. orientation than most folks.

Likewise we have a whole series of different forums, national client seminars and get-togethers all over the country that our competitors don’t do. We learned that if you take your stand in a midsize town in America the clients act like getting together with each other. We have one seminar venue where, in a top-30 city, 200 to 400 clients [come] together in one room for lunch or dinner and they get a very long presentation and a very long Q&A. That arrangement is one we know our clients like a lot.

Another one we’ve done routinely for a long time [that] no one else in does is, we schedule events where we take a whole bunch of clients in a given area who don’t know each other to a lunch; a Fisher person excuses himself in the first five minutes. They talk among themselves and it gives them an opportunity to compare notes. Folks are skeptical of financial services providers in general and fearful they don’t have their best interest at heart. If we can trust them enough to be alone together, that’s a statement that allows them to trust us.

Then we have a little seminar all over the country where we invite 12 to 20 people at a crack. Basically it’s one continuous Q&A, but at a much more technical level. We call these investment roundtables. The clients are into asking more technical or detailed questions, or they may want a bunch of heavy give-and-take, and they can go at it for a good long time with one of our people, and with other people around to chime in. This is all part of our service offering that we’re doing routinely and that other people aren’t doing.

Elmer Rich III

Elmer Rich III

March 2, 2012 — 6:27 PM

If financial services folks ever wonder if marketing, along with hard core sales as follow-up to the leads generated, works. Fisher has $42B proof points.

Continual self-promotion is a critical part of this — to be noted. It’s an asset gathering machine.

Maria Marsala

Maria Marsala

March 19, 2012 — 8:58 AM

Mr. Fisher. Thank you for your insights.



September 2, 2012 — 5:54 PM

I’ve been a client of Fisher’s since early 2008. They put virtually everyone in an all stock portfolio that uses the MSCI as a bench mark. Since early 2008 the Fisher all stock portfolio has not even beat the S&P on an annual basis. Fisher probably works for 80 year clients who don’t understand investing but younger market knowledgable folks probably can easily match or beat Fisher’s results without paying their 1 to 1.5 % management fees. My biggest issue with Fisher is they seem very hesitant to set up a normal income generating portfolio that will pay an income every month. Their answer is just tell us when you need money and we will sell some of your positions. The worst part about the company is Ken’s ego. He really does think he is the smartest person in the business. He apparently did not pull his clients out of the market in 2008 because the last time he did it in 2000 he lost a bunch of clients because he took awhile to get back in the market. Putting one’s business interests ahead of those of your clients is not a good situation when selling ones self as an investment advisor and fiduciary.

Elmer Rich III

Elmer Rich III

November 27, 2012 — 7:53 PM

Yes, many refugees but OUR lawyers would sue us if we ever disclosed names – even in private. Sarbox has made it impossible for us ever to mention anyone we know, have had as clients, etc. Sorry Fisher is also hyper-litigious.

Again, a web search will get you 80% of what you need. Why Fisher and not a local RIA?

Elmer Rich III

Elmer Rich III

November 27, 2012 — 10:42 PM

Sure, just tell them to. You shouldn’t be scared of where your money is going – ever.



November 27, 2012 — 8:08 PM

I’ve searched the web and came up with one lawsuit in 2008 where Fisher lost a case that cost him 300K…Are there any other sites that would have more?? My money is on it’s way to be transferred to Fisher next week.. I’m getting antsy about my decision.. I was with my local bank’s wealth management dept. but was unhappy with the results.. Hope I’m not jumping from the frying pan into the fire..



November 27, 2012 — 9:37 PM

Elmer, My money is on it’s way to Fisher.. They said everything should be transferred by next week, Any way to stop it at this point?



November 27, 2012 — 7:39 PM

Elmer.. Have you or someone you know been a client of Fisher’s?



November 27, 2012 — 6:59 PM

I’ve just became a client of Fisher Investments..I’ve never seen so many different opinions of a firm as I have of Fisher’s.. Hope I did the right thing…I have a hard time believing he could keep 45 billion in assetts under management if he wasn’t doing a good job for investors..I would like to hear from more actual clients about their experiences with Fisher Investments,, Also, from people who have left the firm and their reasons for doing so..You just don’t know who to believe.

Lisa Shidler

Lisa Shidler

November 27, 2012 — 8:20 PM

Tom, It’s RIABiz reporter Lisa Shidler. I just tried e-mailing you but the e-mail we had in the system didn’t work. My e-mail is: lisa@riabiz.com If you send me a note directly, I can send you some links from Google searches on this topic.

Brooke Southall

Brooke Southall

December 3, 2012 — 6:00 PM

Hi Tom,

I’d love to debrief you or have you write a blog account of your adventures in finding an advisor. It can be anonymous. It’s extremely helpful for advisors to understand to step into your shoes.



Elmer Rich III

Elmer Rich III

December 3, 2012 — 6:46 PM


“Give back” and do this. Millions of folks are going thru a process similar to yours. You may get some help as well.

Big Mac

Big Mac

August 22, 2014 — 10:15 PM


Joe Murphy

Joe Murphy

March 1, 2012 — 12:13 PM

I have been using Fisher Investments for several years and find the phone contact to be perfect. My Investment Counselor stays in touch and is very knowledgable.

The seminars are wonderful and I make it a point to attend. I know of no other firm that provides the same opportunity to listen, learn and interact with those that are ultimately responsible for my investments. Most recently, Ken Fisher hosted the seminar I attended in Ft. Lauderdale. This type of stuff puts a personal touch to my relationship with Fisher Investments.

Needless to say, I’m a huge fan of Fisher Investments! I’m also a huge fan of an employer that takes care of the employees and its obvious that Ken has that at the top of his priority list.

Joe Murphy

Joe Murphy

September 2, 2012 — 6:17 PM

I can appreciate your point of view but when I decided to go with Fisher several years ago I knew full well what I wanted them to do with my money and they made it perfectly clear how it was going to be invested. Needless to say, Fisher Investments and myself are on the same page.

Also, 4 years is not much of a time frame to pass judgment on a long-term investment portfolio. Give it time.

Additionally, Fisher Investments is always willing to manipulate my portfolio in any manner I instruct them to. They certainly don’t hold your portfolio hostage to their philosophy.

It sounds like your experience with Fisher Investments and my experience with Fisher Investments is 180 degrees out of phase. As is our personal opinion of Ken. I’d recommend reading several of his books if you haven’t already. I believe Ken Fisher forgets more about investing in one day than most people learn in a lifetime.

Just my opinion, but I’m a very satisfied customer of Fisher Investments and plan maintaining the course well into the future.

Elmer Rich III

Elmer Rich III

September 2, 2012 — 8:30 PM

Ken Fisher is an exceptional marketer. Even more exceptional given the weak marketing in the industry. His approach is neither creative nor original.

We have learned that, generally smaller HNW, investors best respond to the “myth of personality” marketing approach. The investment guru myth is endemic in American culture. Other cultures do not have a strong a myth about individual accomplishment as the US.

The false belief is that an individual portfolio manager can outperform the markets. While the scientific evidence is clear and consistent that this is not true — it is the most widely used marketing and ad strategy. It is also in demand by the media, because it is such a successful, though false, myth.

Fidelity really built its business on this ad strategy using Peter Lynch.

As with all marketing, you get sales by telling people what they already believe, want to hear and what supports their magical beliefs. Con artists do the same — there is research on this as well.

The US asset management’s industry’s celebrity strategy for money managers is probably the most profitable use of the “cult of personality” myths — in the world. Factually, it is a silly superstition.

It is just standard false and mistaken magical thinking. An investor reading more books by a guru is just an attempt to reinforce the sales “religion”/ideology of Fisher Investments — it has no effects on the investor making or losing money, of course.

We can admire good money manager salesmanship and self-promotion while also accepting the claims as false and misleading — which they are in most cases.

Elmer Rich III

Elmer Rich III

November 27, 2012 — 8:47 PM

Wow, now that’s a valuable service. Thanks Lisa.

Tom, why hurry? Take your time and let your emotions cool a bit. You’re worried. Listen to those feelings. Something is bothering you – respect that. If the sales person is pressuring you — tell them not right now.

Spend some time talking to local accountants and RIAs. Let them take you to lunch. Ask RIABiz if you can blog your experiences and ask the community for advice. “It takes a village.”

You’ve made the first good step – you’ve shared your honest discomfort. Banks may not be sophisticated enough for you.

Elmer Rich III

Elmer Rich III

November 27, 2012 — 7:36 PM

Ken is a brilliant marketer and pioneer of consumer marketing in financial services – specifically money management. His tactics were, of course, dismissed. He was a marketing visionary. It has made him incredibly wealthy.

You may want to Google the lawsuits. There have been many.

In terms of what to believe — look for data not anecdotal stories. The data is unanimous that active management delivers no value and large fees erode portfolio value.

How would you pick a doctor for your loved ones?

The best research and facts are on the web and free to all. Before the web, trusting salesmen like Fisher and so called “experts” was the only option. The days of that dependence and restricted information are over.

Celebrity investment marketers typically promise some special skill and knowledge. This has been proven to be false when studies are done.

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