How vulnerable is Fisher Investments in the aftermath of the public relations debacle that began with Ken Fisher’s
Fisher’s firm, the country’s largest RIA with over $110 billion in assets, has already lost nearly $1 billion as a result of Michigan’s retirement system, Philadelphia’s board of pensions and, most recently, Boston Retirement System cutting ties.
Fidelity Investments and the Florida State Board of Administration are reviewing their relationship with Fisher, and other institutions may follow suit.
At the Tiburon CEO conference in San Francisco last week, Fisher, recorded in an
Once news of the remarks got out, Fisher faced fierce criticism. He initially said he
Fisher’s biggest problem, crisis management experts and industry analysts agree, is the close personal identification of Fisher Investments with Ken Fisher, the firm’s executive chairman and founder.
Fisher’s picture or name has been part of nearly every television, print and direct mail ad produced by Fisher Investments since the firm was founded 40 years ago. And the firm has spent millions of dollars on marketing over the decades: Fisher has said the company spends around 6% of revenue on marketing, more than triple the industry average.
“One thing is clear: the business is hugely linked to his name,” says Aite Group research director Alois Pirker, Aite Group research director. “It puts him in a very difficult position.”
The degree to which Fisher is personally associated with his firm makes Fisher Investments “obviously vulnerable” to further loss of business, says Devon Blaine, CEO of Blaine Group, a Beverly Hills, California-based crisis communication consultant.
One thing is clear: the business is hugely linked to his name.
What’s more, Fisher compounded the harm caused by his remarks at Tiburon by how he initially responded to public reaction, according to Blaine and other experts.
“His biggest mistake was acting in disbelief [to the reaction],” Blaine says. “Being slow to apologize was not a good move.”
Fisher’s lack of “situational awareness” also hurt the firm’s image, with potential repercussions for its business, according to Jeffrey Schneider, principal at Lead PR, a New York-based media relations firm specializing in crisis management.
“He didn’t realize how bad the problem was and apparently nobody around him told him,” Schneider says. “By doubling down on his statements, he invited more scrutiny.”
Indeed, the story isn’t likely to go away anytime soon, says Rick Anderson, senior managing director of Feintuch Communications, a New York-based public relations and crisis management firm.
More negative stories about Ken Fisher, especially if they appear in general interest media, may lead to a “snowball effect” of more clients withdrawing their money from Fisher Investments, says Elliot Sloane, a New York–based crisis communications consultant.
The Iowa Public Employees’ Retirement System, for example, is paying close attention. “Fisher’s remarks are obviously concerning,” spokeswoman Shawna Lode
Going forward, “the danger in all of this for Fisher is what else is out there?” Sloane says.
One other example of inappropriate remarks by Fisher at a past public appearance has surfaced.
“The question for the firm is, is this systematic?” Pirker says.“Fisher has made a lot of public appearances and I don’t think there’s a lot of forgiveness for [sexually inappropriate comments] right now.”
With that in mind, Fisher should follow the lead of political candidates entering a campaign who anticipate opposition research attacks, Anderson says.
Fisher should be on the phone apologizing to large investors.
Prior remarks, such as what Fisher reportedly said at the Evidence-Based Investing conference, need to be reviewed, he notes.
Fisher needs to sit down with his staff and a crisis management team “and tell them everything that could come out,” Anderson says. “He has to come totally clean. They have to anticipate any potential lawsuits or revelations and be prepared to deal with them in the public domain.”
Fisher should also be on the phone apologizing to large investors, Anderson adds.
As Schneider puts it, “If there is something else, they need to get ahead of it and be the first to communicate whatever it may be.”
Asked about how the firm plans to deal with the crisis in the days and weeks ahead, Fisher Investments did not return a request for comment.
Sloane recommends that Fisher Investments “restate the core values of the organization and identify ways of speaking to the issues [raised by the Tiburon remarks] in a direct and transparent way,”
Downplaying Fisher’s personal identification with the firm should also be considered, says Blaine.
“He would be wise to reduce his own media exposure and consider having someone else replace him in the ads ASAP,” Blaine says.
That may not be so easy, Schneider cautions.
“That’s probably a pretty tall order,” he explains. “This is someone who has spent his entire career building his business on his personal appeal. It’s a tough thing to convince anyone whose name is on the door to step aside.”
