By now, you probably know that Ken Fisher hates annuities. In fact, according to his current television commercial (click here to view it on YouTube), Fisher would rather "die and go to hell before [he] would sell an annuity." Those are strong words, but they don't offer any nuance to a complex topic. They do, however, scare people into calling Fisher Investments to help save them from the "ravages" potentially wrought by these unnamed, non-specific annuities.
I have never sold an annuity either. As the owner of a fee-only, registered investment advisory, I offer a third-party, no-load variable annuity that I manage for a fee only when it suits a client's purposes, in addition to managing taxable and retirement investment accounts.
However, if someone already owns an annuity (let's say a variable annuity with guaranteed benefits, for some specificity), Ken Fisher's marketing could lead the owner of that annuity to believe it is poison. Your specific annuity may or may not benefit you. An unbiased, non-conflicted analysis must be based on many complex factors, including your personal situation and need for income in retirement. However, Ken Fisher's commercial might make you think you had made a horrific mistake and the way to make up for that mistake is to cash in your annuity and give your money to Fisher to manage, so he can salvage your future.
Don't Fall for Marketing Scare Tactics
Ken Fisher is a rich guy and an enormous success, but his commercials and marketing are designed to ensure his wealth and success, not yours. Nor do his stated management fees, which are 1.25% per annum up to $1,000,000 in managed assets, help you succeed. These are high fees, by any current standard. He implies in another commercial, because he is buying you stocks, not mutual funds (another recent target of his fear marketing), that he is in fact, saving you money, at least compared to mutual funds. (For related reading, see: Mutual Funds: The Costs.)
However, if Fisher pays your commissions out of his fees, as occurs with most wrap accounts, he has reduced his incentive to make any trade that would reduce his profit, even when a trade might benefit you. If you pay commissions in addition to fees, then you must add those to your total costs. Either way, his fear marketing is misleading at best and could be a breach of fiduciary duty at worst. (This is not an accusation of wrongdoing.)
A rising stock market can help you achieve your financial goals. Bond and dividend income can help you. Long-term, rational, low-cost investing can help you. An appropriate allocation can help you. If you own an annuity and are near retirement, that annuity may even help you.
Succumbing to Ken Fisher's fear marketing will not help you. For most people, there are likely many better options than purchasing an annuity. But do not let Fisher, or anyone else, scare you out of an already-purchased annuity without receiving an unbiased, non-conflicted, third-party opinion first.
(For more from this author, see: What Should You Look for in a Financial Advisor?)