Let me deal with the self-interest issue first. Mr Fisher is described as the founder and executive chairman of Fisher Investments and chairman and director of Fisher Investments Europe. I have seen their adverts. They are targetted at the reasonably wealthy soon to be retired person whose portfolio Fishers wish to manage. So Mr Fisher has an alignment of interest with a particular group who want high-interest rates to keep them in retirement and to increase the value of their annuities.
This is the group who have already done best out of the recessionary environment of the last decade.
So, err, they’re arguing for higher interest rates and higher annuity rates because they’ve done so well out of low interest rates and low annuity rates?
First, Mr Fisher’s facts are wrong. Bank margins on lending – which is what motivates them – have not fallen as a percentage or in value terms over the QE period.
Yes, they have. It’s a standard that falling rates compress bank margins. Why? Because a large part of the deposit base doesn’t receive interest. That float of the money passing through our accounts. A fall in lending rates when your cost base is 0% does compress margins.
This is simple well known stuff. But Snippa seems entirely unaware of it. Even though I’m sure I recall him complaining about this at some point in the past.
I won’t be seeking Mr Fisher’s advice any time soon.
And who else should we be ignoring?