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Fisher Investments Complaints

Clients of Fisher Investments have come forward alleging the investment firm failed in its duties to its clients. Among the complaints are that clients were told their portfolios would be tailored to their specific needs—taking into account their risk tolerance and financial situation—when in fact many clients say their account was almost exclusively invested in equity portfolios (i.e. they allege their Fisher investment portfolio was too heavily invested in stocks and not balanced according to their financial needs). Those almost-exclusively equity portfolios were reportedly set up for most customers, regardless of their individual needs.

Individual differences in accounts reportedly involve which sectors of the equity markets the account is focused on, but most, if not all, customers who have come forward have allegedly had their funds invested in equities, including the Purisima Total Return fund.

For an average investor, having almost 100 percent of a portfolio invested in equities can be problematic; if the market drops, it can take a long time to recover losses. For investors who are at or near retirement age, however, a portfolio consisting almost exclusively of equities—that is, a portfolio weighted heavily or mostly in stocks as opposed to having a more balanced or age-appropriate portfolio that includes fixed-income assets and cash or cash equivalents—can be a disaster. Retirees who require investments to provide money to live off and who would normally seek a portfolio that is based on life span asset allocation can suffer devastating stock losses in a bad market.

In other words, the complaints concerning Fisher Investments comprised the following two allegations: that individuals are told they will have a portfolio tailored to their needs and risk tolerance when it is alleged that almost everyone gets the same portfolio; and for many investors having an account that is 100 percent (or almost 100 percent) in equity portfolios is too risky for their needs and risk tolerance.

Fisher Investments Arbitration

Failure to tailor an investment portfolio to an individual’s needs was at the heart of an arbitration filed by Sharyn Silverstein against Fisher Investments. An arbitrator found in favor of Silverstein, awarding her more than $300,000. The JAMS arbitrator, Karen Willcutts, wrote in her decision, Fisher failed to make reasonable inquiry into [plaintiff’s] financial situation, investment experience, and investment objectives or ignored that information. Instead of tailoring its recommendation to [plaintiff’s] circumstances and needs, as it promised to do and had a duty to do, Fisher simply made the same recommendation to [plaintiff] that it makes to the vast majority of its clients: 100 percent equities benchmarked to the MSCI World (MXWO) Index.”

Fisher Investments

Fisher Investments Inc is a California-based company with more than 25,000 clients. It is run by Forbes Magazine columnist Kenneth Fisher and claims to manage more than $41 billion for almost 40,000 accounts.