With 15,000 Fidelity, Schwab and Vanguard staffers there, Dallas metroplex notches Fisher Investments headquarters almost as a formality; Ken Fisher and 1,200 staff are already Lone Star denizens
The $189-billion national RIA of Camas, Wash. evinced being incensed over a Washington state court ruling upholding a state capital gains tax--the final straw behind the move.
7 min read- Fisher Investments relocates headquarters to Texas, citing tax concerns and political climate.
- Dallas-Fort Worth's financial hub attracts Fisher, offering access to talent from major firms.
- Move aligns with Fisher's strategy to emulate and potentially poach advisors from Schwab, Fidelity, and Vanguard.
Brooke's Note: The top line of the Fisher HQ move to Texas is its outrage over taxes back in Washington state. The bottom line may say more. Virtually every big-brand financial player in fiduciary wealth management is hiring disproportionately in that Dallas sprawl. Make no mistake. Fisher is a big brand and growing larger with near 5,500 staff. If anything is holding it back, it's the bane of any RIA – getting lots of quality advisors. By moving to Texas, it can headhunt tens of thousands of advisors – trained and licensed by Schwab, Vanguard and Fidelity. Those prospects are like pre-filleted fish in a barrel. They can drive their own car to an interview and simply take a different exit from a Texas highway for their morning commute.
Ken Fisher has already moved to Texas, and his corporation is now following suit after a state court recently approved a tax on capital gains.
“The headquarters shift is tied entirely to the abysmal interpretation of constitutional law by the Washington State Supreme Court," the company said in response to an RIABiz query.
Fisher Investments is six-years into a plan to be more like mega-competitors Schwab, Fidelity and Vanguard – and potentially poach them in the Texas market.
But the court ruling, which opens the door for the state to impose a capital gains tax, was the proclaimed catalyst behind the move.
Tim Welsh, president of Nexus Strategy, says he's not surprised by Fisher's decision.
“This is a typical response from Ken when he doesn’t get his way. He’s willing to disrupt his operations over any slight, so not surprising – particularly now that most work is hybrid,” he says.
Politically motivated
In the RIABiz statement, Fisher Investments claims the court's actions are political.
“This tax, regardless of your views of it, pro-or-con, is an income tax, not an excise tax,” it states.
"If they can stretch that truth to the extent they did per their opinion, there is no limit to the legal falsities in which the Court can engage for political purposes.
"Without solid laws and stable property rights, the entire realm of ‘40 Act Advisers is vulnerable,” it asserts.
The 2021 state court ruling cleared the way for a 7% tax on the sale of stocks, bonds, and other high-end assets in excess of $250,000 for individuals and couples.
The world's largest RIA takes the cult-on-the-hill to the Washington state woods
The tax is expected to bring in $500 million in funding for early learning and childcare.
Yet, Fisher's move isn't “tied entirely” to the court decision, Fisher Investments concedes.
“The Washington State capital gains tax decision alone doesn’t affect corporate headquarters, but in an abundance of caution, we are moving our headquarters to Plano, Texas,” the company statement said.
“We have been watching this issue since early 2021 when a bill was first introduced in the legislature.
“When the Washington State Supreme Court can make extraordinary decisions and overwhelmingly so—seeming to legislate from the bench versus upholding the state constitution—that could allow for anything in the future and probably will,” it continued.
"We won’t wait until they impair us, inconsistent with basic concepts of the law, before protecting everyone’s interests.”
Gold rush
The Dallas-Fort Worth area is home to a plethora of financial firms.
Fisher Investments said its deep ties to Texas began when it opened an office in Plano, Texas in 2017. It's unclear exactly when Ken Fisher, 72, declared it home and moved nearby.
Story Timeline
“We started exploring a Texas office over six years ago to enhance employee recruiting, give current employees another office option to choose from, and to better serve our national client base," the statement stated.
The private-client RIA has been making the bulk of its hires in Texas over the past four years.
It now has 1,200 staffers there or about 25% of the 5,000-plus staff of the national RIA that manages $188.9 billion in assets, plus an additional $20 billion of AUM in institutional, foreign and 401(k) accounts.
Schwab had 2,500 staffers in Westlake, Texas in 2020 with the ability to house as many as 6,000 in its headquarters. Fidelity has more than 9,000 Texas employees.
Schwab's headquarters shift to Texas amid TD Ameritrade merger seems to please nobody -- outside the Dallas Chamber of Commerce--Omaha feels especially omitted
Vanguard made a similar talent-minded move into Texas in 2021. See; Vanguard Group to open CFP-poaching battle front in Schwab-Fido-Pershing backyard, after its human RIA grows AUM 72% to $231 billion
There has been a gold rush of sorts to Texas because it has what call-center RIAs need most – a big pool of labor.
The area has a broad talent pool for call-center financial advisors, and an advisor can live well on a $160,000 annual salary.
Fisher Investments will continue to find happy head hunting in Texas, says Welsh. “I'm sure he can be competitive in the Texas market.”
Selling first
Fisher's talent-buying power derives from its extraordinary pricing power – levying fees from generic office parks at a level that RIA boutiques typically charge from brass, glass and mahogany emporiums.
It charges 1.25% on clients' first $1 million in assets and 1.125% on the next $4 million. Accounts over $5 million are charged 1%, according to its ADV.
Fisher Investments has 5,435 employees and contractors, a preponderance of which are actual financial advisors.
"[As] our hiring shifts to Plano--and we will increase transfers--so with time our Camas, Washington, headcount will shrink from our current 1,800-plus and Plano, Texas will grow steadily from our current 1,200,” the company said.
Yet the bigger secret to Fisher's success is its ability to bring a sales culture more akin to a wirehouse to a fee-based model, more like a classic RIA.
“It definitely has a sales orientation that most [registered investment advisors] don’t have,” Sheryl Garrett, founder of the Garrett Planning Network told The LA Times in 2019.
“Most RIAs don’t know how to sell, nor would they think of spending the millions a year that Fisher spends on marketing.”
Tax bugaboo
Fisher largely cited tax policy in 2009 as the reason his firm moved to Camas. At issue was California’s 9.3% income tax rate on wages over $43,000.
Washington has no such tax. He also liked that Camas sits on the Oregon border, a state with no sales tax.
His relationship with Texas, however, has had a few rough spots.
The state withdrew $350 million of pension assets from Fisher Investments in Oct. 2019 after his infamous "panties" remarks at a conference. See: Fisher Investments surpassed $100 billion in AUM in early 2019, contained the flames of a late-2019 PR crisis and has a legit shot at hitting $200 billion in AUM this year
Though the headquarters move reacts to “legal falsities,” Fisher Investments says its CEO was granted a say in the executive decision.
“Our decision was finalized by CEO Damian Ornani,” Fisher Investments said.
The headquarters move will be completed by June 30.
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