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Fisher Investments Lawsuit and Arbitration Claim Filed by Clients of Financial Advisor Firm

At least one lawsuit and one securities fraud arbitration claim have been filed against Fisher Investments over losses suffered by clients of the financial advisor firm who lost money due to heavy investments in stocks, despite conservative investment objectives and evidence of an aproaching bear market.

Fisher Investments is one of the largest registered firms of investment advisors in the United States, with nearly 38,000 client accounts. As financial advisors, they have a fiduciary duty to give impartial advice that places their clients’ interests first.

According to an Investment News article, a news source for financial advisors, a Fisher Investments lawsuit was filed this month in Houston to recover losses suffered by a living trust that the firm was managing. In addition, an arbitration claim against Fisher Investments was filed by a retired doctor and his wife, who lost $1.2 million.

The complaints both contain similar allegations that Fisher Investments’ financial advisors breached their fiduciary duty by failing to take steps to protect the conservative interests of the investors. Although signs had emerged of a pending stock market collapse, the clients were almost exclusively invested in stocks.

Financial fraud lawyers expect that dozens of similar arbitration claims are likely to be filed against Fisher Investments in the coming months by other investors who claim to have lost substantial sums of money due to the mis-management and poor advice allegedly provided by their financial advisors.

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49 comments

  1. Robert Reply

    Although if the parties were informed they were going to be mostly in stocks and agreed to it, this case basically falls apart. The clients may say they are “conservative” but I wonder if they did when they first hired the adviser. And if they did, conservative means different things to different people. They may have just meant they didn’t want to invest in hedge funds and commodities and thought that meant “conservative.”

  2. Mark M. Reply

    Was there a IPS?

  3. sam Reply

    This all comes down to what was in their contract which we can’t tell from what’s here.

  4. roge Reply

    How can conservative to be defined?

  5. roge Reply

    sorry, my last didn’t make sense. I meant I was curious about how they were defining conservative.

  6. Gerry Reply

    As a lawyer, I wouldn’t touch one of these cases. Usually there is a contract and an investing statement of some kind all parties agreed to ahead of time. If it goes to arbitration the judge looks at the policy statement and if the advisor followed it, then that’s it, and the adviser wins. If the advisor didn’t follow it, then the client wins. But based on my experience, the policy statements from legit advisers are very clear and signed off on ahead of time. It’s a big waste of everyone’s time and the only one who wins is the lawyer if he charges an hourly fee.

  7. MIKE Reply

    I wish I had seen this “evidence of an approaching bear market.” I don’t think anyone did.

  8. Jim Reply

    Timing sounds more like people upset there was a bear market.

  9. John Reply

    What objectives?

  10. shelley Reply

    Can’t tell from what I’ve read here.

  11. Brian Reply

    As Gerry said this is probably all detailed in the contract the details of which we won’t know.

  12. adam Reply

    What’s an IPS? Sorry if that’s a dumb question.

  13. ronald Reply

    i have been using both products for several years now. i get dizzy,and mine right ring finger gets numb and tingle in the hand. i have gone to the docotr and have had lab work done and everthing isall right and had a shot for the finger it was good for about 2 months but now it is coming back they call it a trigger finger. but it sems that the poligrip was the worst for me in mine mouth i would get like the comment above parched feelings also mine tongue and mouth.

  14. SMG Reply

    Seems like a sizable firm with 38,000 clients

  15. Rich B. Reply

    I’ve never used them personally but I did receive a mailer once, which seemed professional

  16. nancy Reply

    I lost half of my 401k during this bear market. I wish I had somebody to blame but fact is it’s the risk we all take investing in the stock market

  17. BPM Reply

    I’ve seen their banner ads but never checked them out in too much detail

  18. jimmy Reply

    I was reading another article on this website which said these types of claims are up 86% so far this year. Not surprising given the market downturn. But like others here stated, it all depends on the nature of the client agreement.

  19. JT Reply

    What’s an IPS?

  20. ed1 Reply

    I fell off my motorcycle and my helmet cracked and I suffered a fracture to my skull. Anybody know if I can sue the helmet manufacturer?

  21. Bruce Reply

    I’m not surprised people are going after Fisher because they are a large outfit but that doesn’t mean I think the complainants will win the arbitration. Any advisor of any size who’s been in business long enough has had arbitration brought against them including me and my firm isn’t nearly as big. I’ve won every time and easily, but its too bad every time because it can be very costly to the client and from my experience they don’t know that ahead of time. In every case, the lawyer probably could have easily explained to the client up front why they weren’t likely to prevail and saved us all a lot of time and money.

  22. Bill Reply

    I have an account with Fisher;am retired; “conservative”; requested not all equities… my portfolio is about 36% fixed income, 64% equities. Certainly I have lost money, I only post this to state that there is more variety in portfolios than is implied by the remarks here.

  23. Ted Reply

    I know for a fact that Ken does not have his own money invested in his model portfolio. It is all in Treasuries.

  24. Bill Reply

    I’ve been a Fisher Investment Client since Sept 2008. Talk about starting at the wrong time. I got hit in Oct – as I suspect everyone else did as well… I wasn’t an aggressive and they built a 50/50 mix for me. Right now – I’m up a little. But the best thing is- they call and check in and talk to me all the time. I finally have a feel and an understand of how and why my money is being invested the way it is. I suspect the atty are just looking for another free lunch.

  25. STEF Reply

    You get the story that your portfolio will be of individual stocks chosen to form a type of “mutual fund” to serve your investment needs. Then Fisher sends paperwork with the “aggressive” box checked to describe your investment style, and lists a twenty year time line for your investments, even if you are 60. To most people, this should be a dire warning to back off, or at least research some more. I guess if these investors didn’t read the sample Portfolio info they were sent, and signed the papers with these things checked, well……are they liable, even though the investment advice is poor, given their age group and timeline? What about the investment firm’s fiduciary duty to best advise their clients?

  26. Jabob Reply

    Fisher’s definition of conservative investing is an investing style that has the highest probability of meeting ones goals.

    Since the stock market averages around 10% historically over long periods of time, therefore depending upon what the money was for, if the investor had a long enough time horizon of not needing the money, it desn’t matter how old the investor is (the money could be for children etc) the probability of achievng the financial goals are quite high, therfore conservative.

  27. JB Reply

    In presentations, marketing literature, and on the phone, Fisher assured that they would protect against major loss in a down market by getting into a defensive position and/or using puts, etc. They did not take any action at all. Doesn’t ERISA have anything to say about this since mune is a 401K?

  28. David Reply

    I was told that we were only going to have a maybe 10 % correction in early 2008 by the Fisher rep. he was lying, I talked to Schwab and they recommended another firm with less fees, this soft sale crook told me he knew the people went to school with them, that they did n’t know what they were doing and would lose my money, I went with them 4/2009 and fired them 12/ 2008 the stocks they got me into are down still 26%, it was 60%.

    The atty. I talked to here in Pensacola said they put a client that was 90 years old 100% into equities, I hope to see my stocks pay off 1 day but they probably never will.

    In my opinion the Attys are as big a crook as Fisher, you have to sell all the stocks with the attys, some people did this at 50 and 60% losses, then they wanted a $20,000 dollar retainer and then you pay all the fees, they estm. $15,000 then there is no guarantee.

    If I had it all over to do again I would do as I did before, buy the newsletter for Vanguard funds, get in the best funds and never talk to anyone in the investment business, In my opinion they are all, or better put, have a little of Bernard Maynoff in them!

  29. jerry Reply

    I’m still a client in the interest of full disclosure. I kept all the marketing letters they sent me and everything since and I don’t see anywhere where they promise to avoid all bear markets. They did say if they could see the bear market coming, they would take action. What “David” might have heard them say is they thought it would be a correction. My rep explained to me that they didn’t see it coming and missed it (like basically everyone did. Lots of the talking heads like to say they saw it coming because it sells papers, but most of the big forecasters who do manage money were just as surprised as the rest of us). But they’ve been very up front about it.

    What I don’t’ get about David is if he thinks the lawyer is a crook then why listen to what he has to say? He may be be blowing smoke about everything he’s saying.

    My account was down a lot too because the market was down. But this year has been just great with Fisher. I’ve made up a lot of ground in my portofolio because I stuck with it and am very glad I did. And, my portfolio is beating the market by a heck of a lot this year. I’m well on my way to being back to where I was and I am very glad I didn’t panic and sell.

  30. John Reply

    An elderly parent just passed away in another state and while acting as Executors we discovered that he lost nearly 1/2 million in the stock market meltdown in 2008. He had been diagnosed with signs of dementia and signed a POA with my sibling, and then a broker invested 1.5 mil into income and growth funds, and a few life insurance policies just a year before the crash. What can we do? It seems no one took any steps to mitigate these losses, even while the numbers were falling. Other siblings were blocked from seeing informatiion while this was happening. The parent had no idea this had happened while still alive and told of the problem. Now the Estate is worth only 60% of what it was when originally invested.

  31. Phil Reply

    I use Fisher Investments and got hosed in the bear market, just like everyone else. If anyone can name an investment advisor who took its clients out of equities and into cash within a year before the bear market, let me know his name, and I will transfer my accounts.

  32. Steve Reply

    I talked with a Fisher VP today about selling mutual funds and investing with their advise. I was impressed with the presentation….Am i being sold a bill of goods. Does anyone have anything good to say about the firm?

  33. Chuck Reply

    Fisher is a solid company. What you want to know about a company like that is do other smart people hire them. Fisher gets hired to do a lot of institutional money, and those guys do some serious due diligence the likes of which you and I can’t do. So as an example, I saw they were just hired by this group (http://www.globalfundwire.com/2010/09/28/62664/fisher-investments-run-skandia-global-emerging-markets-fund) to manage a big chunk of money. That’s pretty solid

  34. sheila Reply

    I took Accutane 20 years ago…. I now have debilitating Rheumatoid Arthritis (this disease is in the same autoimmune class as Crohn’s). Has anyone experienced development of this disease after so many years? Thanks.

  35. Garth Reply

    The CEO of Fisher Investments has been writing regularly for Forbes for over 25 years. If you want to check up on what he’s said that’s a great place to start in terms of due diligence. You can get all the columns he wrote in a new book the Making of a Market Guru. It’s a hefty book because it has so many columns but that is the kind of research you want to start with. You can also get his performance in the front of the book, and its pretty darn good.

  36. joe Reply

    Beware! Fisher just invests all stocks -same for everybody – and in a downturn like 2008 (until 3/09) lost about 60% of client money. He did not make any safe investments for seniors and retired people.
    Fisher is being sued by many former clients – you can see the suits by just going on various web sites -

  37. Larry Reply

    I am curious of how these litigating clients lost 60%……did they sell out their portfolio and lock in their losses? I went with Fisher in 2008 and understood their strategy of investing in equities. They disclosed the options for us to consider and at any time we could have changed to a more conservative equity/bond/cash mix. Like many other investors we were substantially down but reviewed the bear to bull history provided by Fisher that convinced us not to panic and sell. The results through 2010 were encouraging with the portfolio above the prior year’s valuation after distributions we took during the year. What happened in 2008 is history. The question we asked ourselves what would we achieve by selling out and moving to bonds or cash? We decided that we lost nothing if we didn’t sell and the ride back up was due to the model that Fisher where diversification within sectors is balanced across national and international investments. As retirees my wife and I don’t embrace the mytths of keeping bonds/stocks/cash percentages based upon our ages. I never have understood why the elderly can’t participate in the market vitality that returns an average of over 9% year in and year out in equities. If you do just a little homework you will find bonds can be just as loss oriented. The only time you lose is when you buy low and sell lower. The swings are temporary but in 2008 the market created fear that caused many investors to panic/sell with their destiny to never be able to recover because they locked in those losses and moved to low yielding alternative investments. Ken Fisher’s discussion about the “wall of worry” provides and understanding of investing psychology and his investment advisors are very good at educating their clients in this important dynamic.

  38. Victor Reply

    IMPENDING DOOM
    S&P500 Date Signal
    1240 July 21, 2006 Inverted yield curve

    1451 February, 2007 New Home Sales start decline

    1503 June, 2007 Normal yield curve

    1455 September, 2007 Rapid falling margin debt

    1455 September, 2007 ISM Manufacturing PMI 2nd mo decline

    1531 October, 2007 ISM Non-manuf. Business Activity decline

    1542 October 26, 2007 ECRI Weekly Leading Index significantly down

    1475 November 7, 2007 Multiple Moving Average sell signal Value )

    1440 Nov. 23, 2007 S&P500 annual earnings growth rate to 0%

    1468 December, 2007 Margin debt sell signal (current below 12-month moving average)

    1468 December, 2007 Unemployment rose to the critical level of 13% above a year ago.

  39. Jacob Reply

    Here’s a question: has anyone else noticed that when you google search “fisher investments complaints” the majority of the sites are Fisher sponsored sites that specifically rebut the true complaints people are searching to uncover. The best part is, these sites drive more traffic and are therefore higher on the list of search results, so that whenever anyone searches for complaints against Fisher, they end up at a Fisher site. Is this a fair marketing practice?

  40. deborah Reply

    I left a mis managed advisor in New York almost 2 years ago to go with Fisher. I had read quite a bit about Ken Fisher and his approach in Forbes, etc., and I liked their qualities. They also sent a rep to my home for a discussion of their investment objectives. for me. In the beginning my portfolio rose about $60,000 in a 3 month period. I was elated…. Then, the bottom fell out and I have $138,000 lost in my IRA. 10 years ago, I had $750,000 in my IRA , and now $438,000. I am 62 and disgusted. I am taking money out, building a home in Belize, and buying a small apartment building in Pa. and collecting rents. (I am in the RE business) I am thinking I can’t do any worse then I am doing with Fisher. I, too, believe they were careless and took chances with my valuable retirement fund, and I am so bewildered at what is happening in my country. I am having my own “Occupy Wall Street” right here at home, and taking back my damned life.
    Sincerely,
    Deborah in Canton Ct.

  41. [email protected] Reply

    I KNOW FROM EXPERIENCE THAT THESE SMOOTH TALKERS JUST COUNT ON THE LAW OF AVERAGES TO GET THEM FAMOUS.
    THEY COST ME A GREAT DEAL OF MONEY AND THEY HAVE NO QUALMS ABOUT WHO WINS OR LOSES.

  42. Dwaine Reply

    I have noticed that Fisher Investment news letters seem to be bullish. Even a few months before the greatest decline since the Great Depression a newsletter was pointing toward an up market. I didn’t believe it. I got scared of the trends. I took almost all of my funds out of the market. I am just an average person. Why couldn’t they (Fisher) have figured out the same.

  43. DAvid Reply

    The law requires a RIA (registered investment advisor) to abide by fiduciary duty to honor clients goals, and be conservative with funds of senior retired clients. I asked to be conservative and salesman said that they would go into cash when they saw a bear market coming.
    That was a lie. It was a common sales pitch throughout the country (ie Fisher promising to get into cash during bear markets).
    I lost a lot of money, but Fisher did nothing and I finally fired them before I lost as mcuh as if I stayed in at a 60% loss. So watch out! My advice is don’t trust Fisher with your money, or JAMS arbitration to protect you.

  44. Mike Reply

    Fisher’s research and portfolio management capabilities are mediocre at best. Think about it. How can an equity-based manager find inefficiencies and opportunities when they have to pile in $40bln worth of AUM into the positions? So they focus on large/mega-cap companies (easily recognizable), throw some ADRs in there (to have the clients believe they are well-diversified in an “international” portfolio), spread it across multiple sectors, and have great client service personnel spin, spin, spin.

    And since having so much AUM leads to a considerable “footprint”, it’s in Fisher’s best interest to be a perma-bull and be FULLY invested at all times. Going defensive to counteract bears? Fisher’s guess is – honestly – as good as anyone else’s. Some of the greatest investing minds can call bears correctly 50% of the time. No guarantees whatsoever. It’s easier to take the lumps thru a bear market – and cross their fingers that the downside won’t be too deep – than trying to time the exit AND entry. So like a lot of “professional’ managers out there, they’re truly at the mercy of the markets. A guy like John Paulson made billions “calling” (and more importantly acting) on the 2008 crisis received worldwide adulation/admiration … and the same guy was down 40-50% through his funds in 2011 (with some incredibly poor decisions … Sears, SinoForest …).

    Everyone in the finance biz who has an opinion about Fisher understands they are a phenomenal sales and marketing machine. Ken is not a “genius” or “market guru” … he’s just the figurehead and with his outspoken nature and his Forbes columns and his best-selling books (which his company actually BUYS en masse to merit best-seller status), he oozes credibility. But think Oz. The sales/marketing team … WORLD-CLASS. We’re talking best practice. The highest paid professionals outside a handful of folks on the IPC (Investment Policy Committee) are the sales people. The best will see 7-figure checks. The next in line are the client services/relationship management people – who “are in the trenches” with clients (essentially who the clients will speak with once their account is up-and-running) … they make probably double the industry standard (client servicing).

    So that’s where the strengths are. Not research. Sales, marketing, and client services. He’s what we call a “high-beta” manager … highly correlated to the markets but will outperform when the markets are up, and S the bed when the markets are down. So in 2008, the markets are down across the board (i.e. SP 500 down 37%), Fisher was down in the 40-45% range. In 2009, when the markets were up (i.e. SP 500 up 26%), Fisher was up in the low 30s range. The beauty of the system is if you have long bull markets (the 90s) … then you gain “legend” status for just staying IN the markets. So the hope is that in any given decade, you have 7 up years and 3 down years. Unfortunately, in the 00s, you had two bears – and if you plunked $1 into the SP 500 Index on Jan 1 2000, you were left with 91 cents at the end of the decade.

    The roaring 90s – when all these supposed “great’ managers made soooo much money and collected massive fees? A dollar invested in the SP 500 Index turned into close to $5.50. So that was Fisher. Made his bones in the 90s … but in an environment where it was very easy to generate returns. He just timed it well – setting up his company, setting up his business plan, selling his clients the need for professional money management and “access” to the markets. The demand was there and he supplied it. Nowadays, advisors and brokers are a dime a dozen … and as much as they talk, none are particularly good over time. And discount brokerages allow individual investors to manage their own money.

    So one can denigrate Fisher but it’s pretty much the RIA/broker world in general … Fisher just does it exceptionally well. Why people just don’t take some time to educate themselves, read some Warren Buffet, and buy – and hold – low-cost ETFs (which will get you plenty of exposure) and throw in some fixed-income … I dunno. It’s really not that difficult. Just learn about it, make some moves, and leave it alone.

  45. Joe Reply

    I retired at the end of 2007 and invested my lump sum pension and all my other stocks with Fisher like a complete naive sucker. I really believed that they would take me out of a bear market situation like they did in the early 2000’s. Unfortunately they did not take any of their clients out of the market in 2008! I found out from a former employee that the real reason Ken Fisher did not take his clients out of the market in 2008 was because when he took his clients out in the early 2000’s and then put them back in a little late he lost a boat load of customers. Talk about a complete disregard for his fiduiciary duty!

    Here’s a summary of Ken Fisher’s performance vs the S&P 500.
    2008: Fisher down 42.95% S&P down 37%
    2009: Fisher up 34.8% S&P up 26.5%
    2010: Fisher up 14.1% S&P up 15.1%
    2011: Fisher down 13.8% S&P up 2.11%
    1Q2012: Fisher up 8.4% S&P up 12.2%

    So if you gave Ken Fisher $1000 in 2008 it would be worth $832,50 at the end of the 1Q2012. If you had invested $1000 in the S&P 50 SPY index fund it would be worth $1050.90 or approximately 26% more than the investment with Ken Fisher.

    Please be very careful if you invest with Ken Fisher and please realize what risk you are putting your money in.

    Fisher charges 1.25% commission annually for this stellar performance. I would have been almost 30% ahead of where my account is right now if I had just left it all in cash and drawn out money as I needed it for my expenses!

    I agree with everything Mike said. Fisher is a great marketing company. Do you really want a Marketing company managing your money?

  46. Gerry Reply

    So, did Fisher Investments place anyone else in their “Enhanced Big Cap Securities” fund?
    Took a large % of funds and put them into this new “instrument” which is locked for 12 months.
    According the the disclosure documents (which you can read AFTER you discover they already made the purchase) it states that each “share” carries no value…it is not backed by any stock certificate and is quite risky. As UBS describes it: “…THE SECURITIES ARE SIGNIFICANTLY RISKIER THAN CONVENTIONAL DEBT INSTRUMENTS. THE ISSUER IS NOT NECESSARILY OBLIGATED TO REPAY THE FULL PRINCIPAL AMOUNT OF THE SECURITIES AT MATURITY, AND THE SECURITIES HAVE A LEVERAGE FACTOR WHICH DOUBLES THE MARKET RISK OF THE UNDERLYING INDEX…”

  47. Don Reply

    Over the past 4 + yrs. (04/2008 – 06/2012), I was a client of FISHER INVESTMENTS; I lost over $90,000 + paid about $30,000 in “investment advisory fees” (1.5%) — a net loss of 20%! Dealing with Fisher personnel was an absolute nightmare! In every conversation with them, concerning my losses or about getting out of the market, I would get their “hard sell” i.e., “Trust us, Ken Fisher is an investment guru”, “Ken Fisher’s stock market predictions have been correct over 64% of the time, the most accurate of any investment advisor”, “Any day now the Stock Market is going to move up ‘A LOT’ you don’t want to miss out”, etc, etc,etc.

    For 6.5 yrs. prior to investing with Fisher, I was invested in 3 different Vanguard mutual funds — a net gain of approx. 60% with only 0.4% net costs (management fees, trading costs, etc.). Moving my assets to Fisher Investments was the WORST MISTAKE of MY LIFE!!!

    An investor can profit much more with less hassle by investing in top rated mutual funds or ETFs. Moreover, you will be able to sleep soundly at night without worring about your investments.

  48. Glenn Reply

    After the rising market and some portfolio gains (Oct, 2011 thru early April, 2012) Fisher Investments managed to lose all the gains in my retirement portfolio in just two months. My other investments, mostly in Fidelity mutual funds, are up about 8%. So it’s like Fisher cost me at least 8% plus the out of pocket fees of roughly $4600. They are professional and organized but I’ve had enough. I consider myself lucky to not have lost even more money.

  49. Kevin Reply

    Since a minimum investment with Fisher is $500,000, I can’t believe no one has read a single one of his books (or Forbes columns, for that matter). He clearly outlines his investment philosophy of staying fully invested unless he is totally convinced the bottom will drop out of the market. 2008 surprised many people with the breadth of the market drop. Fisher is a stocks guy. I would only give his firm the money I have allocated to equities. Fixed income and alternatives I would put elsewhere.

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