New York, NY: For at least one woman who put her money with Fisher Investments, the losses were reportedly too much to bear and she filed for an arbitration. According to her complaint, Fisher Investments allegedly failed to diversify her portfolio. Christopher Gray, attorney with the Law Office of Christopher J. Gray, P.C., says overconcentration of a portfolio can be disastrous for older investors.
"There have been legal claims reported in the news media in which investors allege that Fisher Investments overconcentrated their accounts by putting 100 percent or almost 100 percent of their accounts in stocks," Gray says. "Fisher Investments reportedly makes uniform representations to their potential customers that it will employ an individualized investment approach tailored to the client's risk tolerance, time horizon and individual circumstances. In reality, it is alleged that regardless of the clients' individual circumstances and tolerance for risk, Fisher might have invested most of the clients' accounts in nearly 100 percent stock—that the client basically has a stock portfolio."
An all-stock portfolio is not necessarily a terrible thing, but it can be problematic because of its volatility. According to Gray, an all-stock portfolio can have more dramatic swings in value than diversified portfolios, and that may not be appropriate for a person who is at or approaching retirement. A person without an income may not be able to afford the downside of a volatile all-stock portfolio. For those investors, the risks might not be worth it because they may not ever recover from the losses incurred on their investments.
"A general rule of thumb that I've heard from some investment professionals is that for every year of their age, an investor should have that percentage in a non-stock investment, such as a bond," Gray says. "So, if you're 70 years old, no more than 30 percent of your portfolio should be stocks [70 percent should be in non-stock investments]. If you're 50 years old, no more than 50 percent should be stocks. If you can keep the exposure down around the 50/50 level, the returns aren't substantially lower than if you have more in stocks, but the volatility is substantially lower."
Investors who receive monthly or quarterly statements should be able to tell from that statement what portion of their portfolio is in stocks. The good news is that for investors who are heavily invested in stocks, there may be a way to recover their lost money.
"A professional registered investment advisor is under a higher duty to clients than a stockbroker because the customer signs over control of the account to the advisor," Gray says. "The advisor has a duty of prudence and a duty to do what's in the client's best interest, objectively."
Clients who have invested with Fisher Investments may have signed a pre-dispute arbitration clause, which means that rather than filing a lawsuit, they would enter into arbitration with Fisher Investments in the case of a dispute. One arbitration filed against Fisher Investments reportedly resulted in an award to the client, who alleged she lost more than $300,000 when 100 percent of her portfolio was invested in equities benchmarked to the MSCI World (MXWO) Index.
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.
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"There have been legal claims reported in the news media in which investors allege that Fisher Investments overconcentrated their accounts by putting 100 percent or almost 100 percent of their accounts in stocks," Gray says. "Fisher Investments reportedly makes uniform representations to their potential customers that it will employ an individualized investment approach tailored to the client's risk tolerance, time horizon and individual circumstances. In reality, it is alleged that regardless of the clients' individual circumstances and tolerance for risk, Fisher might have invested most of the clients' accounts in nearly 100 percent stock—that the client basically has a stock portfolio."
