You have undoubtedly seen one of his commercials. It’s the one with the famous tagline, “We do better when you do better.” Yes, I’m talking about Fisher Investments and the man who literally stated that “I would die and go to hell before I sell an annuity.” So, why am I saying that he actually loves annuities? Well, in my opinion, it’s all about manipulation. Take a closer look…
As of October 7, 2021, Ken Fisher is worth $6,000,000,000, according to Forbes.com. Yes, six BILLION dollars, with a ‘B’. He does not have to worry about market volatility. However, most people in America do. Yet here is a man that spends millions of dollars every year in negative marketing to convince people either to surrender their annuities or never transfer a portion of their assets into an annuity.
This is a man who was literally caught on camera at a 2019 financial conference in San Francisco comparing bringing in new clients to his firm, to picking up a girl in a bar. His comparison was regarding the topic of not speaking to clients directly about their money or financial planning. You need to schmooze them a little bit. According to Fisher, who again is worth six BILLION dollars, “you wouldn’t go up to a woman in a bar and ask, what’s in your pants.” Probably not the smartest analogy at the height of the #METOO movement. That one comment cost Fisher over $4 billion in assets under management. But don’t feel too bad because he still has over $160 billion of other people’s money to risk and collect a fee from.
Ken Fisher is everything I hate about the financial planning world and why I have personally decided to opt-out of it. I do believe there are good people in the financial planning industry that are trying to do the right thing, but they normally do not last very long. I met a man named, Mike, about ten years ago at my gym and we struck up a conversation about investing. I could tell he was getting angry about the topic, so I asked, “did you have a bad experience with an investment?”.
His response was, “Actually, I was a financial advisor for (a large brokerage in St. Louis. You would know the name), and one day we were just finishing up a strategy meeting with one of the directors, and I asked, why are we recommending XYZ Mutual Fund over ABC Mutual Fund when XYZ is obviously so much worse for our clients?”. He told me that the managing director gave him some BS answer, and after the meeting pulled him aside and scolded him for asking such a question in front of the other advisors in an open forum. Well, Mike quit that brokerage house and financial planning as a whole. At the time that I met him, do you want to know what he was doing for a living? He was driving a school bus. I asked how he could make such a transition and his response was, “I’m not cut out to be in a world that takes advantage of people for profit. Now, I have a great schedule and I will get a pension!” I have a lot of respect for Mike.
Anyway, back to why Fisher, and other financial planners, LOVE annuities. The main reason, in my opinion, is that annuities are easy targets for him to pluck assets from. He cannot go toe-to-toe with Vanguard or Schwab because their fees are so much lower than his. I had a client reach out to me several years ago who had his money with Fisher and was paying 1.8% in fees!
If you have read any of Fisher’s commentaries on annuities, and if you understand annuities, it is blatantly obvious that he is talking about Variable Annuities. I personally hate variable annuities too. This is where Fisher and I actually agree. In fact, I have written an entire report solely on the dangers of Variable Annuities (please reach out and I’m happy to send it to you if you do not have it). VA’s are wrought with high fees, low payout percentages, and you can still lose money inside of a VA. So, he rails on “annuities”, lumping all of them into a single category, and then convinces people to surrender their policies.
That can be extremely irresponsible, but Fisher does not have to play by the same rules that I do. He does not need an insurance license to give advice on annuities, but I need a securities license to give advice on other investment products. See how the scales are tipped in the favor of fee-based money managers? And with the right marketing, you could very easily convince people to move their safe money to a place where it will be risked and lost at any given time in the future.
Security laws do not have the same prohibition and he publicly offers “rebates” for the surrender charges an annuity holder may incur. What’s more, the manner of the rebate isn’t even regulated. It could be a rebate in chicken wings if he so chooses.
If you think there is some governing body out there, like the SEC, protecting you from predators that do this kind of stuff, there isn’t! Remember Bernie Madoff??? He was inspected numerous times by the SEC and they did nothing. Fisher’s fine print discloses that the surrender charge is rebated over time in the form of reduced advisory fees. Oh, you didn’t notice that on page 341 of the contract?! (Joke).
Great, so my $500,000 annuity now becomes $365,000 (for example) and it will take how long to recoup my $35,000 in management fees? And how much growth opportunity will I lose on that $35,000 in the meantime? Plus, if you are another client of Fisher, wouldn’t you be angry that you are paying more in fees and subsidizing annuity investors because your money came from a different investment?
Another reason Ken loves annuities is that they are easy to liquidate. No conservation, or waiting for the opening of business, or trying to get a hold of your advisor, because customer service insists you talk with them before you decide what to do with your money.
When Ken helps a client surrender an annuity, he is not bound by the same rules of suitability, churning and replacement – all insurance laws that protect the consumer from fraud and unsuitable sales.
Why else does the man who says openly, “I would die and go to hell before I would sell an annuity”, and “I hate annuities and you should too”, and has referred to them as, “scumbag products”, actually love annuities? Well, maybe he loves them because he knows how stable annuity companies are financially. In 2014 his firm held over $85,000,000 in American Equity stock. Along with 2.88 million shares of Prudential which happens to be the parent company of Jackson National Life Ins. Co. He has since liquidated those positions. Total hypocrite!
If you want to protect your money, you want an annuity. Plain and simple. But it has to be the right type of annuity. And that is what I do best with my Atlas Annuity Strategy. I can promise that you will never receive a letter as my clients did from Fisher in 2009 after his firm lost a boatload of their money. In the interest of trying not to get sued for some obscure rule that I don’t even know exist, I’ll give you some of the excerpts:
“In recent months, as in late last year, I and my firm have failed to correctly see the market’s short-term direction.” Wait. Isn’t that your job? Isn’t that why your clients pay enormous management fees? Oh, that’s right. No one, including Warren Buffet, will know when the next crash will happen.
“As you know, everyone here tries very hard and means very well and receives absolutely no benefit from delivering to you the very best conceivable results.” Really? I think you did receive a benefit. You still collected your management fee from this client’s vastly depleted portfolio.
His whole BS marketing slogan of, “We do better when you do better”, should be followed up with, “but when you do terrible, Fisher still does pretty well.”
Not to mention when he rails on “high commission products” regarding annuities, he conveniently omits the fact that not a single penny comes out of your pocket. Not one single penny. That commission is paid out of the insurance company’s general fund. But he makes it sound like you’re writing a check for that commission. But I have never noticed him talk about his fees being withdrawn from your account, even after he loses your money.
“But I do want take these few moments to acknowledge for you that we know that our forecasts have been wrong, that we know how hugely important and vital these assets are for you, and that we feel very bad about the recent results.” Well, thanks Ken! As long as you feel bad about it! And yes, these assets are “vital” for these investors. This is the money they depend on to survive in retirement. But Ken will be okay because he still got his management fee that quarter. Unbelievable.
“Thank you for being a client, for your continued patience, and for maintaining your resolve in working toward your longer-term objectives.” What happens if you get a letter like this when you are 75 or 80 years old? You most likely have no long-term objectives! You need income to pay for food! If you take a hit as this client did and the only guaranteed income you have is Social Security, that’s your new living standard. Because one of the worst things you can do financially is pull money out of a depleted portfolio. Again, unbelievable!
Okay, I think I’ve ranted on this guy long enough for this week. I will pick up next week with my answers to his “Top 10 Questions You Should Ask About Annuities.”
But I would like to encourage you to go through that letter again. Imagine you receive a letter like that after you are retired and no earned income coming in. How would you feel if you were 15 years into your retirement and the same guy who convinced you to surrender your annuity with a guaranteed income sent you this apology letter? And again, that’s all it is. An apology. No restitution. No legal action you can take for someone losing your money. Nothing. You’re stuck holding the bag from reckless speculation in the market.
What I can promise you, however, is that you will never receive a letter like this from Atlas or any of my carriers. My products are guaranteed to never go backward due to market volatility, and if your situation calls for an income rider, you will have a guaranteed income for you and your spouse no matter how long you live and no matter what the market is doing. And your expense for that income rider will most likely be quite a bit cheaper than a management fee from a big brokerage house like Fisher.
I lay out exactly how I get 20% more spendable income in retirement in my video series using the Atlas Annuity Strategy. You can view that series by clicking the link below. Take the time to watch them, and then schedule a time for a short phone conversation to find out how exactly I could do that for you. Either click the “Schedule A Call” button or reach out directly at 636.926.6500!
All the best,