Complaint Review: Fisher Investments - Redwood City California

I have a story with similar timing and outcomes....

My father died in 2008 just before the stock market crash. He always had the Ralph Cramden/Fred Flintstone "I'm going to hit it rich" thing going on, and his last stab was to hand all his money to Fisher Investments in the early 2000s. Well, after he died I was going through his stuff with my mom (who is utterly clueless about investment stuff) and saw that Fisher had her invested 100% in stocks, which seemed insane to me for an elderly woman. So, we set up a call with one of their "advisors" and he started giving me some condescending BS, saying "You don't understand. There's an old way of investing, and a new way of investing." So I said to him "OK. So if you're right and I'm wrong, do you promise to make my mom whole if there's a market correction and she loses half her money?" Of course he wouldn't do that.

Well...my mom, bless her heart, thought I was being rude to the "nice young man" and told me she couldn't deal with figuring out finances and we should just leave things where they were. And, as we know, there was a huge market correction a couple months later and my mom lost half her money and now doesn't have enough to live on. Her finances have not recovered since then -- Ken Fisher is a BS artist extraordinare (hey pal...how long are you going to live off your lucky dot.com bust call from 2001? What have you don't for anyone in, oh, the last decade?), and they have no problem talking little old ladies out of their money.

I invested several million dollars with Fisher Investments in the early 2000s.  I had been looking for an investment advisor for several years and wanted one that I thought had a logical approach to investing in equities.

After seeing a Fisher Investments ad, I submitted an inquiry and got a call from a sales rep.  After a number of back and forth questions and answers, I bit.  I liked the fact that they claimed to provide worldwide diversification and told me that if they predicted a downturn in the market, they would get entirely out, hedge, or substantially get out.  Made sense to me.  And they had predicted the last couple of market downturns, although their timing was typically not very good (either many months late or early).

My account value initially decreased, but after a few months it started a slow climb -- nothing spectacular, but a climb nonetheless.

In the early part of 2007, I became quite concerned about the housing market and the apparent bubble in the equities market.  By the late summer of 2007, I was concerned about the upside/down yield curve.  So, during that entire year, I asked my "investment counselor" (a young kid not too many years out of college) if Fisher was going to get out of the market entirely, was going to hedge or was going to get out mostly.  He repeated on about a monthly basis what his superiors were telling him (that the downturn in 2007 was a temporary pause in the bull market and not to worry).

Of course, in October 2007 the crap hit the fan and the market crashed.  FI's strategy was that it was too late to sell and the equities that had crashed the most would be the ones that would recover the fastest.  By the spring of 2009, my account was worth 40% of what it had been in the fall of 2007.  Fisher continued to be optimistic.

FI holds client seminars around the country each year and so in the Q & A session in 2008, I asked one of their VP's how many years it would take my account from the late 2007 crash to get back to that 2007 value.  He said 3 to 5 years.

Of course, the worldwide equities markets continued to crash even further until they bottomed in the spring of 2009 -- about 18 months since the 2007 crash. 

Three to five years from the October 2007 would have been October 2010 and five years would have been October 2012.  By October 2012, my account was still down 20% from the 2007 high -- FIVE frickin' years.

It's now May 2014 (6.5 years from that 2007 high) and my account is still down 3.5%.

My advice:  run away from Fisher Investments.  They are more of a marketing firm than an investment firm.  They have a very slick and sophisticated initial and ongoing marketing pitch, and so it sounds good for a long time until you figure out what's really their strategy re their clients.

They want you to stay fully invested and their status reports constantly peddle positive markets ahead.  It may be because their thinking is that over time equity markets do make money.  However, while they claim that their expertise is figuring out things that the rest of the market doesn't know, they failed miserably for 2007.  And they seem to have little propensity for ever exiting the market. 

Maybe that's because if they put their clients' funds in cash, many of those clients wouldn't see any benefit in paying their 1.0% - 2% annual fees . . . .

Run, don't walk.

We fired the people at Fisher Investments on December 21, 2012 after nearly six years of poor results and one missed market call after another.  We had spent $38,423 in fees to get a - 3.04% return.

We received a letter also dated 12/21 a week later from Kevin Gil, Investment Counselor Group Manager at Fisher Investments.  he confirmed that "our portfolio is down slightly (-3.85%) since inception" in May 2007.

He goes on to say that given my investment time horizon of 30 years or more, that if I were more patient they "are confident we could have helped you reach your goals had you remained a client."  Hello....?  I am now 54 years old.  Is this guy suggesting that I should remain with them until I am 84 years old and hope and pray that at some point they would start giving us positive returns?

Kevin Gil took issue with my comments in our termination letter where we stated "that we have no confidence in the ethics or competence of the firm" and that Fisher is "suckering" high wealth individuals into giving them funds to mismanage.

Kevin Gil concludes his letter with a thinly vieled threat that says " we realize you have a right to express your opinions but we trust you will remain factual and professional when doing so as false comments are actionable."

Well Kev-Boy....  Those are the facts....  $38,423 spent for six years of a cumulative negative return      (-3.85%).  We would have done better in most no-load index mutual funds!

These guys are apparently so scared or so arrogant that they attempt to silence unhappy customers with threats about "actionable" comments.

Stay away from Fisher Investments!