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Business Leader of the Week: Meet Abigail Johnson, force behind Fidelity’s market dominance

IFM_Fidelity Investments CEO Abigail Johnson
In 1988, Abigail Johnson joined Fidelity Investments as an analyst and portfolio manager

Fidelity Investments, formerly known as Fidelity Management & Research (FMR) is an American international financial services company. It was established in 1946 and as of December 2021, it is one of the largest asset management companies in the world with a valuation of USD 4.5 trillion.

Fidelity manages a huge family of mutual funds, runs a brokerage business, offers life insurance, retirement services, index funds, wealth management, securities execution and clearance, and custody of assets in addition to fund distribution and investment advice. As of 2023, Fidelity has 40 million individual investors, USD 9.6 trillion in assets under management, USD 3.6 trillion in discretionary assets, and handles 3.1 million trades each day.

Fidelity is known for supplying top-notch research, practical tools, and extensive educational resources. It provides commission-free online trading for stocks, penny stocks, ETFs, and others. The majority of the account costs that brokers impose, like transfer and account closure fees, domestic wire fees, and check fees, have also been eliminated by the company.

In order to assist traders in identifying investment opportunities, Fidelity offers a variety of powerful research tools and asset screeners. For equities, ETFs, and fixed income, there are numerous pre-built and programmable screeners available. More than 140 criteria and around 20 subjects, including artificial intelligence, drones, and cloud computing, are included in the stock screener. Detailed ETF-focused research includes topics, analyst ratings, and the ability to search funds by a particular stock.

Fidelity has consistently been achieving high rankings in ‘Best for Beginners’ category due to its wide range of instructional courses. The learning centre provides educational content through articles, videos, webinars, infographics, and webinars. An individual may also ask knowledgeable coaches about trading during live, interactive sessions with the “Trading Strategy Desk”.

The year 2018 was a record-breaking year for the company. For the first time ever, Fidelity’s yearly revenue exceeded USD 6 billion. Its operating income increased by 19%, thereby reaching USD 6.3 billion. The Boston-based company generated a record USD 20.4 billion in revenue in 2022, a 12% increase from 2021.

The brain behind this successful venture is a 59-year-old philanthropist and CEO of Fidelity Investments, Abigail Johnson.

    Who is Abigail Johnson?

  • Abigail Johnson is an American billionaire businesswoman and granddaughter of the late Edward C. Johnson II, the founder of Fidelity Investments
  • She graduated from Hobart and William Smith College, United States, with a bachelor’s degree in art history in 1984 and then did her MBA at Harvard Business School
  • In 1988, Abigail Johnson joined Fidelity Investments as an analyst and portfolio manager
  • In 2001, she was promoted to President of Fidelity Asset Management, a subsidiary of Fidelity Investments
  • In 2007, Abigail Johnson became one of three vice-chairperson of the company and was promoted to the president’s post in 2012
  • As of March 2013, the Johnson family owned a 49% stake in Fidelity, with Johnson herself holding an estimated 24.5%.
  • In 2014, Abigail Johnson was appointed as Fidelity CEO by her father Edward Johnson and in 2016 she became the company’s chairman
  • Talking about Abigail Johnson’s political commitments, she gave Republican contender Jeb Bush USD 2,700 in 2015, the maximum amount that can be legally given to a presidential primary campaign
  • Abigail Johnson was named on Forbes’ “The Richest Person in America’s 50 Largest Cities” list in 2016 and ranked sixth in 2021 on their “Powerful Women” list
  • She was the richest person in Massachusetts in 2020, and as of 2023, her wealth is around USD 22.6 billion
  • Abigail Johnson is the first and only woman to serve on the board of the Financial Services Forum, an American, non-partisan economic policy and advocacy organization

Initiatives For Young Women

Abigail Johnson founded Fidelity’s Boundless initiative in 2015 with the sole purpose of encouraging more young women to pursue careers in the financial industry. She has commissioned teams to study how the sector is perceived across genders.

In an interview given to cfi.co, she remarked, “Asset management is a great career for women. We have a real need right now to recruit more women, because when women customers come into our branches very often the first thing they say is ‘I want to work with a woman’. We don’t have enough women who are customer-facing.”

“Women as customers are really quite different. They tend to under-rate their abilities as stewards of their own financial situations. They describe themselves as beginners, even though they know more than they give themselves credit for, and they tend to be more methodical,” she added.

Fidelity In No Mood Of Slowing Down

Fidelity is also planning to hire 734 new technologists in the first half of 2023 as part of a 4,000-person workforce expansion roadmap. It also invested USD 4.2 billion in 2022 to maintain, enhance and upgrade its IT systems, in order to reach millennial and Gen Z clients, as well as acquire metaverse capabilities and upgrade its advisor tech stack. The company also filled over 17,000 associate roles in customer experience, technology, product management and investment research departments.

“Despite the stock and bond market declines last year, we increased hiring and spending on customer service, technology, and new products,” Abigail Johnson wrote in a letter attached to the company’s annual report.

Image Credits: Forbes YouTube

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