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Wednesday, March 26, 2014

It Really Is Abby's World

News summary by MFWire's editors

It was a long time coming, and there were naysayers, yes there naysayers, but Abby Johnson is in charge at Fidelity.

And she's already making her mark.

To be sure, she faces challenges, a lot of them. This excellent Boston Globe article outlines many of them, which include "fierce competition, increased government regulation, sluggish investment flows, and the rise of passive, low-fee investment funds that cut into profits."

In the article, Jay Fitzgerald also notes that Fido has dealt with problematic flows. For example, Fidelity saw a combined net outflow of $64.88 billion in 2010 and 2011, according to Fitzgerald. However, he also notes that during 2012 and 2013 combined, investors put $11.5 billion more into Fidelity funds than they withdrew, according to Morningstar Inc.

Sure, she faces challenges as she steers a ship that for so many years was under the command of her father, Ned. However, most of the challenges she faces are the same ones faced by most in the industry. What she ultimately decides upon to address them will serve as more than as example, it will likely have a direct impact on many players.

And Fidelity has its own special take on things. For years, the joke in the industry was the Fido wasn't a mutual fund firm so much as it was a technology company that happened to sell mutual funds. Perhaps, many who laughed at the joke were just jealous that the Johnsons know how to spell distribution.

Fidelity is already changing. The firm is letting go of many old buildings in the heart of Boston and has moved operations to newer, more modern digs. The Boston Behemoth is, albeit slowly, entering the worlds of ETFs, and even alts. They're hiring all sorts of people, including public relations and communications folk. The firm has a new head of asset management.

Journalists are even getting responses to media requests regularly in the form of phone calls from real human beings (gasp twice!).

What does Abby have planned next for us? We've no doubt she'll show us soon enough.

We're looking forward to it. 

Edited by: Tommy Fernandez


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