How Ken Fisher's Industry Comeback Failed (And It's Not What You Think)

To make friends in troubled times you need more than divisive messaging and dog-eat-dog posturing. We watch him to avoid his mistakes, not to emulate them.

When Ken Fisher decided to emerge from obscurity a few days ago to attack Warren Buffett, we reported on it because it made him look small.

We got a few complaints all the same, arguing that the $120 billion man from TV has been cancelled and his opinions, no matter how short-sighted they might be, aren’t worth even discussing.

I disagree. It’s important to watch and dissect his mistakes. He’s somewhere between a teachable moment and a warning for everyone in the industry who wants to be a better competitor and ultimately a constructive force.

He’s made a lot of noise in the last year. It’s what he does. But there are all kinds of noises. Some build the kind of industry environment you want to see. Others don’t.

Fisher has never been about a cooperative strategy or a shared win. That’s what his one-sided spat with Buffett is really all about. 

He doesn’t want colleagues or allies. He just wants all the assets so he can run them through his machine and keep the scale coming.

Ken Fisher always seems to stand apart from what we call the advisory industry. There’s a reason for that.

One against all

Start with the famous TV spots. Fisher Investments rarely if ever focuses on pure investor education. They aren’t interested in developing demand or opening up new markets.

In this “red ocean” competitive model, that’s what the rest of the industry is for. We nurture prospects, sometimes spending years waiting for a relationship to translate into a new account.

At that point, Fisher ads start fishing for grievances, hoping to drive a wedge between clients and advisors and ultimately capture some alienated assets.

The message is destructive and opportunistic, tearing down what other people have built in order to capture the benefits. Ethically, that’s just naked business. Economically, it’s rarely the smartest long-term tactic.

For one thing, the more clients you pull away from other advisors, the more enemies you make. Maybe you offer those clients a tangibly better experience, but with Fisher, positive assertions are usually scarce.

Sure, Fisher doesn’t charge hidden fees or commissions. He doesn’t do anything illegal, the same as anyone else who can pass an SEC audit.

But when your primary competitive plank is that you don’t do any of the bad things other people get away with, your real messaging revolves around tearing down those other people.

Maybe he’s an industry watchdog, some kind of self-appointed advocate of the everyday investor. We have those people already. We call them the fee-only movement.

What he is, however, is the guy whose name is on the door of a $120 billion RIA. He’s in business to gather assets. He can do that by either offering people a better relationship or by scaring them away from the one they have.

Over and over, he chooses the latter course. To be fair, a lot of us compete that way. It’s easy to scare people away from bad actors and relatively hard to get them to fall in love.

Years of intra-industry channel wars have left a lot of investors cynical and confused. Many have a great reason to be frustrated with Wall Street business as usual at this point, but the question is what YOU can do for them.

Fisher takes the buzz words everyone else uses. “High touch.” “Transparent.” “Flexible.” These are good things, but they’re practically the cost of doing business in the industry today. 

They aren’t real distinctions. They’re just soothing chatter.

Blue ocean versus red sea

Can advisors band together to get a better outcome for everyone? 

Fisher only got to $120 billion last year. That’s a lot of AUM for most people to match, but a dozen big offices or 30-40 smaller ones across the country would be able to match his overall footprint.

It only takes 30-40 of your best friends in the industry to sit down and share best practices, platform architecture and prospects. 

I think you can do it more efficiently than Fisher with what must be a $70 million annual ad budget. For one thing, you won’t be competing with each other for prospect attention.

For another, you can trade relationships or provide recommendations when a client in the “network” needs specialized expertise. This isn’t rocket science. It’s the team advisory model.

We do it all the time, making friends with clients’ accountants and lawyers and doctors. In the best scenarios, we lead the team. That’s how we demonstrate value.

Fisher built a big company but it’s only his name on the door. He has a lot of enemies outside those doors. 

And what happens when he runs out of people he can peel away from existing advisory relationships? His whole machine revolves around that process.

The machine is not running fast right now, by the way. His ADV reported $120.9 billion in assets at the end of the year. By the end of April, his site could only boast of $110 billion.

The decline is exactly where the market would suggest. Likewise, last year, after his fall from grace, his people bragged about how the business was still growing despite institutional funds pulling their money out.

Sure. The fourth quarter last year lifted everyone’s boats. Fisher AUM expanded 7.9% between the end of September and the new year. The S&P 500 surged 9.4% during that time.

Adjusted for natural appreciation, there’s less than zero organic growth in these numbers. The big simply get bigger when account balances go up. 

Look behind the noise and Fisher is fading. Maybe the old messaging has hit a wall and everyone else’s clients are no longer falling for it.

I don’t think he sees that. But we can keep our eyes open and do better. After all, most of us have at least a few friends in the industry. 

Technically, we “compete” for theoretical assets. In practice, we can help each other. And then a zero-sum game becomes a little better than a dog-eat-dog world.

Maybe there’s room in this business for multiple good actors to thrive.

Don't call it a comeback

Meanwhile, industry rehabilitation seems low on Fisher's list of priorities. He isn't "one of us," however you want to construct that in group.

What interests him is signs of weakness within the group. If there's a business model getting bad press or a client segment he sees being underserved, he'll go on the offensive.

That's not a team player. That's a raider, a lone wolf mentality. If that's who you are, great. You know who you are and where you fit into the world.

The dot-com years taught me that technology really does favor network mentality. We made our money on weird new hybrid relationships somewhere between competition, cooperation and cooption.

We all made money. Silicon Valley still makes money in this kind of ecosystem where cells spin out of giants, do specialized jobs and then get reabsorbed in the M&A cycle.

Money flows. And it likes to flow in quantity, which is how most multi-client advisors work in the first place. There's strength in numbers.

Fisher ultimately travels alone. That's his choice. Even Buffett has Charlie Munger by his side. 


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