Does Fisher Investments Sell Annuities? Unveiling the Truth

No, Fisher Investments does not sell annuities. This is a core tenet of their investment philosophy, as they generally view annuities as complex and often expensive financial products that may not align with their clients’ long-term investment goals and overall financial well-being.

Why This Matters: Understanding the Fisher Investments Approach

Fisher Investments, founded by Ken Fisher, operates on a distinct investment philosophy centered around active management, global diversification, and a fee-only structure. This approach heavily influences their product offerings and ultimately explains their stance on annuities. To truly understand why they abstain from selling these products, it’s essential to delve into their core principles.

The Fee-Only Advantage

Fisher Investments operates as a fee-only financial advisor. This means they are compensated solely by the advisory fees paid by their clients, based on the assets they manage. This model is designed to mitigate potential conflicts of interest that can arise when advisors receive commissions from selling specific financial products, like annuities.

Active Management vs. Passive Products

Fisher Investments strongly believes in active management, where their investment professionals actively research and select investments with the goal of outperforming the market. Annuities, often categorized as insurance products with embedded investment components, are generally not viewed as fitting within this active management framework.

Transparency and Simplicity

Fisher Investments emphasizes transparency and simplicity in their investment strategies and client communication. They aim to provide clients with a clear understanding of their investment approach, fees, and the rationale behind investment decisions. The complexities and potential hidden costs associated with some annuities can run counter to this principle.

Digging Deeper: Why Fisher Typically Avoids Annuities

While Fisher Investments does not actively sell annuities, it’s crucial to understand the reasoning behind their reservations. Their critiques often center on:

• High Fees and Commissions: Many annuities come with upfront commissions, surrender charges, mortality and expense risk charges, and other administrative fees. These fees can significantly erode investment returns over time.
• Lack of Transparency: The complexity of annuity contracts can make it difficult for investors to fully understand the fees, risks, and potential returns associated with the product.
• Surrender Charges: Early withdrawal penalties, known as surrender charges, can restrict access to your capital and diminish the value of your investment if you need to liquidate your annuity before the surrender period expires.
• Opportunity Cost: Investing in an annuity may limit your ability to participate in other investment opportunities that could potentially offer higher returns or greater liquidity.
• Suitability Concerns: Fisher Investments prioritizes tailoring investment strategies to each client’s unique financial situation, goals, and risk tolerance. They believe that annuities, given their inherent complexities and limitations, may not be suitable for all investors.

Frequently Asked Questions (FAQs) About Fisher Investments and Annuities

These FAQs are designed to provide further clarity and address common inquiries regarding Fisher Investments’ position on annuities.

1. If Fisher Investments Doesn’t Sell Annuities, What Do They Offer?

Fisher Investments provides personalized investment management services tailored to each client’s unique needs. They construct diversified portfolios composed of stocks, bonds, and other investments, managed by their in-house team of investment professionals.

2. Does Fisher Investments Ever Recommend Annuities?

While highly uncommon, it’s theoretically possible that Fisher Investments might acknowledge the existing presence of an annuity in a client’s overall financial picture during a comprehensive financial planning discussion. However, they are highly unlikely to recommend the purchase of a new annuity.

3. What is Fisher Investments’ Opinion on Fixed Annuities?

Fisher Investments generally views fixed annuities as having limited growth potential compared to other investment options. While they offer a guaranteed rate of return, that rate may not keep pace with inflation or other market opportunities.

4. What About Variable Annuities? Are They Ever a Good Choice?

Fisher Investments often expresses concerns about the fees and complexities of variable annuities. They typically believe that investors can achieve similar investment goals with greater flexibility and transparency through a managed portfolio of individual securities.

5. Does Fisher Investments Offer Retirement Income Planning?

Yes, Fisher Investments offers comprehensive retirement income planning as part of their wealth management services. However, they typically focus on generating retirement income through portfolio withdrawals and other strategies, rather than relying on annuities.

6. How Does Fisher Investments Help Clients Manage Risk in Retirement?

Fisher Investments utilizes a diversified investment approach to manage risk in retirement. They strategically allocate assets across different asset classes and geographic regions to mitigate potential losses and preserve capital.

7. What Types of Clients Does Fisher Investments Typically Serve?

Fisher Investments typically works with high-net-worth individuals and families who have substantial investment assets. Their minimum investment requirements may vary depending on the specific services offered.

8. What Are the Fees Charged by Fisher Investments?

Fisher Investments charges a fee based on the assets they manage. This fee typically ranges from 1% to 1.5% per year, depending on the size of the account and the services provided. They do not receive commissions or other forms of compensation from third parties.

9. How Does Fisher Investments Differ From Other Financial Advisors?

Fisher Investments distinguishes itself through its active management approach, global diversification, fee-only structure, and commitment to transparency. They also emphasize education and communication with their clients.

10. Is Fisher Investments a Fiduciary?

Yes, Fisher Investments operates as a fiduciary, meaning they are legally obligated to act in their clients’ best interests. This fiduciary duty requires them to provide unbiased advice and recommendations.

11. Can I Transfer My Existing Annuity to Fisher Investments?

You cannot “transfer” an annuity to Fisher Investments in the traditional sense. Because Fisher Investments doesn’t manage annuities, they wouldn’t take over direct management of the annuity contract itself. If you have an annuity and become a Fisher Investments client, they would likely analyze its role in your overall financial picture and potentially advise on strategies like surrendering the annuity (if feasible and beneficial) and re-investing the proceeds in their managed portfolios, carefully considering any associated costs and tax implications.

12. What Should I Do If I Have an Annuity and Am Considering Working With Fisher Investments?

If you already own an annuity and are considering working with Fisher Investments, be prepared to discuss it in detail with their investment counselors. They will evaluate the annuity’s terms, fees, and potential benefits to determine if it aligns with your overall financial goals. They may suggest alternatives to generate retirement income without relying on the annuity. This conversation is crucial for creating a holistic financial plan tailored to your specific circumstances.

In conclusion, Fisher Investments’ firm stance against selling annuities stems from their commitment to fee-only advice, active management, transparency, and a belief that many annuities can be complex, expensive, and potentially unsuitable for their clients. Understanding this perspective is crucial for anyone considering Fisher Investments for their wealth management needs.