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Mutual Fund Store vs. Ken Fisher

Go into any of the 70 or so locations of the Mutual Fund Store and show your statements with $50,000 or so to invest and you’ll get recommendations about which mutual funds to buy.

Go into any one of Ken Fisher’s dozens of offices nationwide and you’ll be urged to turn over your portfolio for management (of course, he’s advertising for larger clients — “Do you have $500,000 or more to invest?” — but their advisors will “do you a favor and work with you” even if you’ve only got a $100,000 or so to turn over).

Something about these approaches works and works well – each of these companies has billions of dollars under management.

The Mutual Fund Store claims over 29,000 clients and over 5 billion dollars under management.

Ken Fisher’s private client group claims billions of dollars under management for more than 20,000 individual investors and 100 large companies.

Mutual Fund Store Math

Let’s do the math on the Mutual Fund Store:

5 billion dollars at 1% average fee annually is $50,000,000 (that’s fifty million bucks if my calculator is working correctly). Divide that by 70 locations and that’s an average of $714, 285 per location.

Of course, they don’t get to keep ALL of that money…they have to send some to Adam Bold at the main office – let’s say 40% or so. That means the average Mutual Fund Store advisor is bringing in a little more than $428, 500 per year.

If the average fee is 1.5% instead of 1% (search as much as you want on the website, you can’t find a clear statement about how much the fees are…), then you can add 50% on to the revenue figures.

That would be $75 million bucks per year total and close to $643,000 per year per office on average. For that kind of money, just about ANYBODY would be in love with mutual funds come hell or high water! That “small fee” turns into some mighty big money when you add it up.

And don’t forget: These numbers only represent about HALF of the total cost to the individual investor… the mutual funds they recommend also charge fees and have other costs associated with their ownership!

Fisher Investments Fees

With the Fisher Investments approach, you at least eliminate one layer of fees because they don’t use mutual funds. Your portfolio will consist of individual stocks, maybe some bonds,  some cash, maybe some other types of investments. Fisher’s website says that “most clients generally pay under 1.5% in total average annual expenses” so the math is very similar to the Mutual Fund Store – Fisher’s company is bringing in somewhere around $75 million to $100 million per year, depending on how many billions are actually under management.

Any way you look at it, these two companies are making a lot of money… for themselves. As far as making money for their customers? Only the customers of the Mutual Fund Store and Fisher Investments themselves can answer that question.

 

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