Woodside, CA:While the enterprise at the center of an investment controversy holds that "losing an arbitration once every seven years is a record far better than any major competitor," the alleged disconnect between the stated wishes of the investor and Fisher Investments, the firm to which the investor entrusted her cash, leaves one asking the proverbial question, "whose money is it anyway?"
The success of Ken Fisher Investments, the firm founded by noted financial guru and Forbes columnist Kenneth Fisher, is undisputed. According to recent regulatory filings with the US Securities and Exchange Commission (SEC), the enterprise boasts $41 billion in managed assets on behalf of nearly 40,000 accounts, most of them individuals.
An author and popular investment columnist as well as CEO of his investment firm, Fisher has enjoyed an enviable track record with the vast majority of his clients invested completely in stocks.
However, according to an interim arbitration report obtained by Bloomberg News, a complete and total investiture in equities is not what the investor in the case, Sharyn Silverstein, wanted. This, according to Fisher Investment complaints contained in the arbitration case.
According to the interim arbitration document, Silverstein had not sought out Fisher Investments CA as a potential investment vehicle, but rather had simply responded to a free book offer from the firm as advertised in USA Today. However, according to the report, the complainant found herself at the receiving end of alleged pressure on the part of a Fisher Investments representative to transfer a number of fixed-income securities to Fisher for investment in equities.
The risk profile, according to the arbitrator, was at odds with the wishes and risk tolerance of Silverstein and her husband.
The case was arbitrated by JAMS, a private company based in Irvine, California.
According to the complaint, Silverstein alleges she made it clear to Fisher representatives that the couple planned to undertake withdrawals from the portfolio upon husband Seth's retirement, which had been planned within the year when the investments were first discussed in 2007. As the complainants had no children, there was no need to grow an inheritance.
However, in spite of the investor's stated goals, a representative with Fisher Investments is alleged to have placed Silverstein's investment assets completely into stocks based upon a profile that reflected a zero need for income, and an objective to increase the value of investments at the time of death.
The latter objectives, allegedly entered into special software dubbed the "Suitability Wizard" designed to generate and design a suitable investment portfolio matched to a particular risk tolerance, may have proved a good fit for a 100 percent placement in equities, but did not reflect the investor's true intent, it is alleged.
"Fisher failed to make reasonable inquiry into Ms. Silverstein's financial situation, investment experience, and investment objectives or ignored that information," wrote JAMS arbitrator Karen Willcutts in the interim award document obtained by Bloomberg.
"Instead of tailoring its recommendation to Ms. Silverstein's circumstances and needs, as it promised to do and had a duty to do, Fisher simply made the same recommendation to Ms. Silverstein that it makes to the vast majority of its clients: 100 percent equities benchmarked to the MSCI World (MXWO) Index."
According to the interim arbitration document, Silverstein lost a little over $376,000 from her initial holdings of $876,357 in bonds during the year she was invested with Fisher investments, from September 2007 to October of the following year. Bloomberg data for the time reflected a loss of 36 percent in the MSCI World Index, v. a gain of 2.4 percent enjoyed by the Merrill Lynch US Broad Market Index of bonds over the same period.
However, Bloomberg reports that Silverstein may recoup her losses, as there is a possibility that Fisher Investments might have to pay damages representing the out-of-pocket losses incurred by Silverstein due to an alleged breach of fiduciary duty on the part of the investment firm.
In addition to recovering her loss of $376,075, Silverstein may also recoup her attorney's fees, interest and other expenses, according to Bloomberg's interpretation of the interim arbitration award.
Fisher Investments stands by its position. "The decision was completely wrong on the law and the facts," said David Eckerly, group vice president corporate communications for Fisher Investments. "With more than 25,000 clients, losing an arbitration once every seven years is a record far better than any major competitor, which underscores the integrity of our firm."
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to a financial lawyer who may evaluate your Fisher Investments claim at no cost or obligation.
LawyersandSettlements.com - A trusted, independent legal news provider bringing quality news and information on all legal cases and lawsuits filed in United States of America to its readers since 2002. Over 250,000 legal help requests including Financial Cases, Consumer Frauds, and Business Frauds have been forwarded to lawyers all across to the country.
Email
The success of Ken Fisher Investments, the firm founded by noted financial guru and Forbes columnist Kenneth Fisher, is undisputed. According to recent regulatory filings with the US Securities and Exchange Commission (SEC), the enterprise boasts $41 billion in managed assets on behalf of nearly 40,000 accounts, most of them individuals.
