Ken Fisher is a well-known American billionaire investor and founder of Fisher Investments, a fee-only financial advisory firm managing over $140 billion. While Ken Fisher’s investment philosophy of being globally diversified and avoiding market timing has proven successful, Fisher Investments’ fees have come under scrutiny and can significantly impact net returns. This article will analyze the typical fees charged by Ken Fisher’s firm and how they compare to other wealth managers.
Fisher Investments charges over 1% in total advisory fees
Fisher Investments is a fee-only registered investment advisor, meaning they earn money exclusively from the fees charged to clients and receive no commissions for investment products recommended or sold. Their standard fee schedule charges 1.5% annually for the first $1 million, gradually declining to 0.65% for over $50 million. With an average account size of $1.7 million, the typical client would pay around 1.2% per year in advisory fees to Fisher Investments.
Additional hidden fees can push total costs to 2% or more
In addition to the advisory fees, Fisher Investments clients pay ticket charges for trades made in their accounts. These transaction fees are not disclosed but have been estimated at 0.5% or more annually. There are also underlying expense ratios charged by the mutual funds and ETFs held in portfolios. Combined, total fees can approach 2% per year for a typical Fisher Investments client.
Fees are at the high end compared to competitors
Other large automated investment platforms like Wealthfront and Betterment charge between 0.25% to 0.40% annually. Even traditional full-service financial advisors typically charge around 1%. By most estimates, Fisher Investments’ all-in costs are at the high end of the industry for a primarily passively managed portfolio. However, the firm justifies higher fees due to account monitoring, tax management and client services.
High fees can substantially reduce long-term returns
While reasonable advisory fees provide value, outsized fees act as a drag on performance. Paying an extra 1% every year can reduce total returns by over 15% over 25 years, assuming a 6% annual return. This demonstrates the power of compounding – unnecessary fees compound as well over time. Investors should pay close attention to all-in costs instead of just advertised fee schedules when evaluating investment managers.
Fisher Investments charges total annual fees of around 1.5% for a typical client when all costs are factored in. This is at the high end of the industry for a predominantly passive investment approach. The compounding impact of high fees can significantly erode long-term returns, so investors should carefully evaluate if the extra costs are justified by additional services provided.