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Home / Business / Here's why other retirement plans may not rush to release Fisher Investments

Here's why other retirement plans may not rush to release Fisher Investments



Kenneth Fisher, CEO of Fisher Investments, speaking at Forbes Global CEO Conference in Sydney, Australia, Tuesday, September 28, 2010.

Gillianne Tedder | Bloomberg | Getty Images

It remains to be seen how long other clients will stick to billionaire money manager Ken Fisher in the wake of comments from colors and sexists he recently made at an investment conference.

Nearly $ 1 billion in public pension assets has left Camas, Washington-based Fisher Investments so far, including the Boston Retirement System with $ 248 million in assets and $ 600 million the state of Michigan says it is retiring.

Philadelphia's pension board also said it would move $ 54 million it has with Fisher.

While state-run pension funds account for a relatively small amount of total assets managed by Fisher Investments, $ 1

0.9 billion from 36 units, according to the firm's legal filings with the Securities and Exchange Commission, how responding can be a time for other customers in the company, say industry experts.

In total, Fisher had $ 94 billion in total assets as of December 31, 2018, according to ir SEC filing. That figure reached $ 112 billion as of September 30, 2019, according to the company.

The rate at which pensions moved assets from the money processor surprised even lawyers who specialize in pension plans.

That's because these plans usually take two to three quarters to decide if they want to switch investment advisers, said George Michael Gerstein, an attorney at Stradley Ronon in Washington, DC

"I typically warn opponents of plans to behave too quickly in deciding whether to shoot or hire or offer a new investment option to participants, "he said.

Who's left

The shootings were spurred by sexist comments Fisher made at the Tiburon CEO meeting on October 8 – which also cited public officials as a reason to fire his company.

Fisher has since apologized for his comments.

"Some of the words and phrases I used during a recent conference to make certain points were clearly wrong, and I shouldn't have made them," he said in a prepared statement. "I realize that this kind of language has no place in our company or our industry. I sincerely apologize."

While some investors may retrieve their assets and retire at any time, pension plans tend to move consciously, even though they invest their funds with a number of managers.

This may be why other plans are not yet urgent for Fisher exits.

The Florida State Board of Directors, which has a $ 175 million relationship with the company, has been in contact with Fisher Investments and is performing its due diligence, said John Kuczwanski, a spokesman for the plan.

Furthermore, Haverhill expects the Massachusetts Retirement System, which has about $ 200 million in total assets, the next step in an upcoming board meeting in November.

"It's up for discussion," said administrator David Van Dam. Haverhill pension plan has invested $ 13 million with Fisher.

Public pension plans are governed by state law, and the boards that govern them are fiduciaries – even though the federal laws that apply to company plans for 401 (k) do not apply to them.

This means that the pension plans must act in the best interests of their recipients and participants, and they must support their decisions with due care.

"There are many quantitative and qualitative factors that were considered before deciding to remove someone," said Marcia Wagner, founder of The Wagner Law Group in Boston. "It's not a quick decision."

Prudent Process

Hinterhaus Productions | Image Bank | Getty Images

Fiduciaries of the research plan undertake prior to the departure of an investment manager include analyzing fees and performance and determining how that manager fits within the overall asset mix of the plan, Wagner said.

Plant regulatory authorities are also responsible for assessing whether a relocation could harm recipients either in the form of higher costs or a reduction in service, said Bradford Campbell, partner at Drinker Biddle in Washington, DC.

A plan can put a service provider on a watch list for several quarters while undergoing appropriate research, Gerstein said.

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"It is a duty to continuously monitor the care of service providers to ensure that they serve the interests of the plan, "he said. "It's not a decision to" say it and forget it. "

While it may be pointless for a retirement plan to drop an investment advisor in a matter of days, this latest trend may be a sign that the plan is confident.

"People are people, and if they find something to be really disgusting, they will vote with their feet," Wagner said.

CNBC's Elly Cosgrove, Jessica Dickler and Will Feuer contributed to this report. [19659034]
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