Fisher Investments launches diversity task force

In wake of sexist and crude comments made by billionaire Ken Fisher, some large clients of RIA reevaluate their dealings with the firm

Oct 11, 2019 @ 2:19 pm

By Jeff Benjamin

Fisher Investments is launching a diversity and inclusion task force in the wake of crude comments made earlier this week at an industry conference by company founder Ken Fisher, according to internal memos obtained by InvestmentNews.

The documents, which were delivered to the more than 4,000 employees of the $110 billion RIA, included an apology to employees by Mr. Fisher as well as comments from chief executive Damian Ornani reiterating that, "Ken's comments were wrong."

In a document signed by Mr. Ornani, he highlighted the firm's commitment to diversity as well as its track record of hiring and promoting women.

But he also acknowledged Mr. Fisher's history of making statements that are similar to of those made earlier in the week at the Tiburon CEO Summit.

"Many of you have often heard how Ken refers to longtime employees who have the Vision & Values 'in their bones.' He will often say they 'bleed Fisher green' or have 'FI stamped on their butt,'" Mr. Ornani's memo reads in part.

The memos cap a contentious week for the nation's second largest RIA that was triggered by a video posted on social media criticizing Mr. Fisher's comments during a fireside chat presentation on Tuesday at the Tiburon conference in San Francisco.

Backlash

Mr. Fisher is starting to encounter a wider backlash as a result of his presentation

Clients of Fisher Investments, including large institutions, are in a position to reevaluate their relationship with Fisher. "Fisher's remarks are obviously concerning," Shawna Lode, a spokeswoman for the Iowa Public Employees' Retirement System, told Bloomberg News via email. "Although our investment management contracts do not include a conduct policy, we hold our partners to the highest standards and reserve the right to amend or sever any contract at our discretion." Fisher manages $386 million of the Iowa pension's $34 billion.

Fisher Investments also manages 401(k) plans for dozens of companies, including Hames Corp., a family-owned grocery chain in Alaska.

Review Relationship

"It certainly taints their reputation,'' Maxwell Rule, chief financial officer of Hames, said in a phone interview. "I wouldn't comment at this point whether this would lead us to take our business elsewhere, but I will certainly have a conversation with the ownership regarding that. As a fiduciary I have an obligation to have that conversation."

In a letter to employees on Friday, Fisher Investments chief executive Damian Ornani said the firm plans to start a diversity and inclusion task force. In a separate letter to the staff, Mr. Fisher apologized and said he understood that his comments reflected poorly on him and the firm.

"Let me be clear: Ken's comments were wrong," Mr. Ornani said. "He has admitted that and apologized for them."

Mr. Ornani defended the firm's commitment to women and cited favorable statistics about females in leadership roles at the firm. The CEO said the firm has the same commitment to its female employees as it does its male employees. He said 30% of the firm's managers are women and 23% of the vice presidents or above are females.

But he said the firm could do better and the new task force would examine all aspects of the state of diversity and inclusion at Fisher.

Mr. Fisher, 68, a longtime market commentator and conference speaker, has come under fire for comparing the process of gaining a client's trust to "trying to get into a girl's pants" and talking about genitalia at the financial services conference.

Audience members said they were appalled by the remarks. Tiburon Managing Partner Charles "Chip" Roame said in a statement Thursday that he was "extremely disappointed" and barred Fisher from future events.

Mr. Fisher initially said he was surprised that people found his remarks offensive. But two days after the conference, facing a barrage of criticism, he issued an apology.

Job Recruitment

"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," Mr. Fisher said in a statement Thursday. "I realize this kind of language has no place in our company or industry. I sincerely apologize."

Mr. Fisher founded his Camas, Wash.-based firm in 1979. His investors include more than 175 large institutions and 65,000 high-net-worth individuals, according to the firm's website.

The firm participated in a job recruitment fair on Thursday at the University of Washington, about 180 miles from its headquarters. Students at the fair expressed consternation after hearing about Mr. Fisher's comments.

"That's just insane that someone who is so influential feels the entitlement in order to say things like that, especially in the kind of society we're in today where people are trying to push for women being respected in the workplace," said Nams Nayak, a senior political science major. "It's just disappointing."

Tinsley Hembree, who represented Fisher at the company's booth, said it's too soon to see an impact on recruiting. The firm has more than 1,700 employees, according to a May regulatory filing.

"Ken's comments were taken out of context," she said. "He is a colorful person and can say some outlandish things, but I personally have never been impacted by any type of harassment or ever felt degraded as a woman working in a finance firm, especially Fisher."

The Hames CFO said Mr. Fisher's comments were "absolutely unacceptable" and inconsistent with his company's core values of diversity and respect.

"I'm monitoring the situation and seeing what develops and how he comes back and responds to the situation," he said.

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