When Abigail Johnson, the chair and CEO of Fidelity Investments, was recently asked to advise those in the early stages of their career, she emphasized the core values that she and her firm have embraced for decades, "Don't doubt yourself. Keep at it. Stay looking ahead. Stay committed and stay true to yourself," she said.
Johnson has been Fidelity's CEO since 2014 and its chair since 2016. Last year the Boston-based firm reported a 15% increase in revenue in 2021, which bested its 13% jump for the previous year) as retail-investing accounts scaled 22% to 32.4 million. The gains were buoyed by a flood of new retail investors who joined the market with the help of government stimulus money issued amid the continued pandemic lockdowns.
Fidelity's multiyear effort of capturing a younger investing demographic also contributed to the firm's impressive earnings: 2.3 million new individual investors aged 18 to 35 have joined the roster of Fidelity clients over the last several quarters.
One-fourth of U.S. households now hold digital assets, with those under 30 years old demonstrating the greatest interest. Approximately 39% of Gen Z and 38% of millennials now interact with digital assets regularly, most often on their mobile phones. Johnson's organization has remained ahead of the curve in catering to this increasingly influential demographic.
"Being able to understand younger customer profiles really helped us," she
"If you think about the structure of anything that trades on the blockchain versus anything that trades through the legacy world of settlement, there is just nothing that is the same," she said. Elaborating on the hurdles of integrating the company's legacy business with Fidelity Digital Assets, she said, "There is a whole service model in the legacy financial services business that is hard to reconcile with what you get as a customer experience in today's digital-asset world."
In a post-Consensus memo, Johnson called for a doubling down on digital assets, reiterating her firm's commitment to cryptocurrency. She sees the current cryptocurrency pullback as inevitable — a healthy market correction. She is recommending contrarian thinking — "to persist when others hesitate" — in the face of the current crypto winter.
The company also is figuring out how it can reach more women, who control a growing pool of investments. Fidelity has been hiring more women for its branches, as well as redesigning them to be more welcoming to customers.
"We had gotten feedback that our branches were too corporate," Johnson said. "The same people who did our offices did the branches, so I guess it wasn't that surprising. It's just that no one ever stopped to think about it."
A hiring push is taking place behind the scenes through Fidelity's Leap program, an initiative to attract recent IT graduates to work for the company. "Half of the new technologists in this Leap program are women," Kathleen Murphy, former president of Fidelity Personal Investing, said in the interview with Bloomberg.
But even as it looks for new customers and explores new technologies like blockchain and robo advising, Fidelity is not giving up on actively managed funds. "I'd like to think that people will continue to pay for active management," Johnson said in the interview. "That's the core value proposition that we've been known for forever."
