The Ken Fisher Annuity Contradiction: Why He Actually LOVES What He Claims to Hate

Have you ever seen those commercials with the tagline “We do better when you do better”? That’s Ken Fisher of Fisher Investments – the same guy who famously declared “I would die and go to hell before I sell an annuity” Yet despite his public disdain, there’s compelling evidence that Ken Fisher actually loves annuities – just not for the reasons you might think.

As someone who’s spent years analyzing the financial industry’s tactics, I’ve found this contradiction particularly fascinating. Let’s dive into why this billionaire investment manager has such a complex relationship with the products he publicly criticizes

The $6 Billion Motivation Behind Fisher’s Annuity Stance

According to Forbes, Ken Fisher is worth approximately $6 billion. With that kind of wealth, he doesn’t need to worry about market volatility like most Americans do. Yet he spends millions annually on negative marketing campaigns targeting annuities.

Why? The answer is both simple and concerning:

• They’re easy targets for asset acquisition: Fisher can’t easily compete with low-fee giants like Vanguard or Schwab, but he can target annuity holders
• Regulatory asymmetry: Fisher doesn’t need an insurance license to criticize annuities, but insurance professionals need securities licenses to critique investment products
• Lumping all annuities together: He primarily criticizes variable annuities but doesn’t distinguish between different annuity types

The Variable Annuity Smokescreen

It’s worth noting that Fisher’s criticisms often focus specifically on variable annuities. In fact, many financial professionals (including those who promote other annuity types) share these concerns about variable annuities, which can feature:

• High fees
• Lower payout percentages
• Potential for market losses

But Fisher’s marketing typically doesn’t make this distinction clear. Instead, he lumps all annuity products together, potentially misleading consumers who might benefit from fixed indexed annuities or other annuity types that don’t share the same drawbacks.

Fisher’s Questionable “Rebate” Practices

One particularly troubling tactic involves Fisher’s offers to “rebate” surrender charges for clients who liquidate their annuities to invest with his firm But these rebates come with significant fine print

1. The rebates are provided over time through reduced advisory fees
2. Clients may experience significant initial losses (surrender charges can reach 10% or more)
3. Opportunity costs on those surrendered amounts are rarely discussed

Let me give you a real example: If your $500,000 annuity becomes $365,000 after surrender charges, how long will it take to recoup that $35,000 loss through reduced management fees? And what growth opportunity are you losing in the meantime?

The Hypocrisy Factor: Fisher’s Own Annuity Investments

Perhaps most revealing is Fisher’s own investment history. Despite his public disdain, his firm once held over $85 million in American Equity stock and 2.88 million shares of Prudential (parent company of Jackson National Life Insurance Company). These are major annuity providers!

This suggests Fisher understands the financial stability of annuity companies quite well – he just doesn’t want YOU to benefit from their products.

The 2009 Apology Letter That Says It All

After the 2008-2009 financial crisis, Fisher sent a letter to clients that included these revealing statements:

“In recent months, as in late last year, I and my firm have failed to correctly see the market’s short-term direction.”

“We know how hugely important and vital these assets are for you, and we feel very bad about the recent results.”

“Thank you for your continued patience, and for maintaining your resolve in working toward your longer-term objectives.”

This highlights a fundamental problem with Fisher’s approach: When markets crash, his clients lose money, but he still collects his management fees. Meanwhile, annuity owners with principal protection features don’t need apology letters – their principal remains intact.

Fixed Indexed Annuities: What Fisher Doesn’t Want You to Know

While Fisher criticizes annuities broadly, he conspicuously avoids discussing the benefits of fixed indexed annuities, which offer:

• Principal protection from market downturns
• Potential for moderate growth linked to market indexes
• Optional income riders providing lifetime income guarantees
• No direct management fees taken from your account (unlike Fisher’s 1.8% management fees)

For retirees concerned about market volatility or outliving their savings, these features can be invaluable – which is precisely why Fisher would rather you didn’t know about them.

The Marketing Psychology Behind Fisher’s Approach

Fisher’s anti-annuity campaign utilizes classic fear-based marketing tactics:

1. Research what people fear (annuities and their salespeople being “bad”)
2. Write headlines to stoke those fears
3. Either confirm or deny those fears
4. Inspire fearful readers to take desired action (in this case, transferring assets to Fisher Investments)

This approach can be particularly effective with retirees who are already anxious about financial security and making irreversible mistakes.

Critical Questions to Ask About Any Financial Advice

When confronted with powerful marketing like Fisher’s, ask yourself:

• Has this advisor reviewed my specific financial situation before making blanket recommendations?
• Does this person offer a full range of financial solutions, or are they biased toward specific products?
• Are there peer-reviewed academic studies supporting this position, or is it primarily marketing?

What Academic Research Actually Says About Annuities

Contrary to Fisher’s claims, numerous academic studies suggest that guaranteed income annuities can play a valuable role in retirement planning. In fact, many experts recommend them as alternatives to low-yielding bonds within a properly structured income plan.

The Bottom Line: Why Fisher Actually Loves Annuities

Ken Fisher loves annuities because they represent a massive pool of assets he can potentially acquire through fear-based marketing. Every annuity owner who surrenders their contract and moves assets to Fisher Investments represents new management fees for his firm – regardless of market performance.

For someone who claims to “do better when you do better,” the financial incentives tell a different story. Fisher does better when you surrender your annuity and pay his management fees instead.

Is an Annuity Right for You?

I’m not suggesting all annuities are perfect for everyone. Like any financial tool, they have appropriate uses and limitations. The right annuity type for your situation depends on your:

• Age and retirement timeline
• Income needs and goals
• Risk tolerance
• Overall financial picture
• Tax situation

What’s important is getting objective, client-centered advice rather than being influenced by fear-based marketing from someone with an obvious conflict of interest.

Key Takeaways

• Ken Fisher primarily criticizes variable annuities while failing to distinguish between different annuity types
• His firm benefits financially when consumers surrender annuities to invest with him
• Despite his public stance, Fisher’s firm has invested in major annuity providers
• Fixed indexed annuities offer benefits that may be valuable for certain retirement situations
• Academic research supports the strategic use of annuities in retirement planning

Remember, good financial decisions aren’t made based on clever marketing or fear tactics. They’re made based on your specific situation, goals, and needs. Don’t let someone with a $6 billion net worth and a clear agenda make those decisions for you.

What’s your experience with annuities or Fisher Investments? I’d love to hear your thoughts in the comments below.