Fidelity Investments

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Fidelity Investments

Type	Private company
Founded	Boston, USA
Headquarters	Boston, USA (FMR), Bermuda (FIL)
Key people	Edward "Ned" C. Johnson 3rd, Chairman of the group Will Danoff, Manager of Contrafund, Fidelity's largest fund, Harry Lange, Manager of Magellan Fund
Industry	Financial Services
Products	Mutual funds, Trading & Investing, Retirement & Planning
Revenue	$12.87 Billion USD (2006)
Net income	$1.18 Billion USD (2006)
Employees	41 200 (2007)
Website	fidelity.com (FMR) fidelity-international.com (FIL)

Fidelity Investments is a group of privately held companies in the financial services industry. It is made up by two independent but closely cooperating companies, Fidelity Management and Research Corporation (FMR Co.), founded in 1946 and serving the North American market, and Fidelity International Limited (FIL), spun off in 1969 to provide investment products and services to clients outside the Americas. Fidelity Investments includes a large family of mutual funds, their distributors and investment advisors, and a retail brokerage, as well as unrelated businesses.

1 Mutual funds and stock brokerage
2 Benefits outsourcing
3 Other businesses
4 NASD troubles
5 Ownership and operations
- 5.1 Innovative marketing
6 Competitors
7 See also
8 References
9 External links

[edit] Mutual funds and stock brokerage

Fidelity is a privately held company founded and controlled by the Johnson Family. Fidelity Management & Research Company, the investment management division of Fidelity Investments, acts as the investment adviser to Fidelity's family of mutual funds. FMR Company has three fund divisions: Equity (headquartered in Boston, Massachusetts), High-Income (Boston) and Fixed-Income (Merrimack, New Hampshire). Actual day-to-day management of these funds is subcontracted by that company to one or more of its subsidiaries. The company's subsidiaries serve as distributors and transfer agents to the entire Fidelity fund family.

Fidelity Investments serves more than 21 million investors through individual and institutional accounts, with more than 300 different funds. Revenues in 2005 were $11.1 billion, up 10 percent compared to 2004. Assets under management rose nine percent to $1.2 trillion at the end of 2005.

The company's largest mutual fund is Contrafund, which has more than $69 billion in assets, making it the largest single-manager fund in the US. The current manager of Contrafund is Will Danoff. Magellan Fund is the second largest fund, with $45 billion in assets. Its current manager is Harry Lange, who previously managed the Fidelity Capital Appreciation Fund. The Magellan Fund was for many years the largest in the United States. It was run by Ned Johnson (May 2, 1963 to Dec. 31, 1971) and Peter Lynch (May 31, 1977 to May 31, 1990).

Fidelity Investments also operates a major online discount brokerage and has investor centers in about 100 cities throughout the US and Canada, as well in Europe and Asia.

[edit] Benefits outsourcing

In addition to its mutual fund and brokerage businesses, Fidelity also has a strong presence in the HR and benefits outsourcing business. Fidelity Employer Services Company is the largest provider of 401(k) retirement plan services in the country. Other services provided include pension administration, health & welfare administration, as well as payroll and other HR record-keeping services.

[edit] Other businesses

Fidelity Investments also owns many unrelated businesses, including a charter motor coach service, a luxury hotel, and a temporary employment agency. It formerly owned Community Newspaper Company, the largest chain of newspapers in suburban Boston, sold to the Boston Herald and now owned by GateHouse Media.

[edit] NASD troubles

US brokerages regulator NASD fined four FMR-affiliated broker-dealers $3.75 million for alleged registration, supervision and e-mail retention violations in February 2007. The broker-dealers settled without admitting or denying the charges.

Fidelity Brokerage was ordered to pay $2 million to settle charges that employees altered and destroyed documents in 21 of its 88 branch offices from January 2001 to July 2002. Fidelity has internal inspections every year to make sure it is complying with federal regulations. The Securities and Exchange Commission accused that Fidelity management pressured branch employees to have perfect inspections and gave advance notice of the inspections and that at least 62 employees destroyed or altered potentially improper documents maintained at branch offices including new account applications, letters of authorization and variable annuity forms.

[edit] Ownership and operations

The founding Johnson family controls most of Fidelity. Edward "Ned" C. Johnson 3rd is chairman of the group. His daughter, Abigail Johnson, was once the largest single shareholder with about 25%, but in October 2005, it was reported that she had sold a "significant" portion of her shares to family trusts, and that there are doubts as to whether she is still in line to succeed her father. [2]

The FMR mutual funds are organized as Massachusetts business trusts tied to the lifetime of the Johnsons. Some of Fidelity's best known fund managers also own a share in the company, most notably Peter Lynch.

Revenue in 2003 were US$9.2 billion, followed by US$10.5 billion in 2004. As of 2003 Fidelity had 29,424 employees.

FMR's corporate headquarters are located in Boston, Massachusetts, with the largest U.S. operations located in Marlborough, Massachusetts, Merrimack, New Hampshire, Smithfield, Rhode Island, Westlake,Texas, Covington, Kentucky, North Carolina, Ohio, and Utah. It also has offices in Canada in Toronto, Montreal, Calgary and Vancouver. As of 2006 Fidelity is in the process of opening a large site in Jacksonville, Florida, to serve as a customer service center similar in size to its New Hampshire site.

FIL's offices include asset management companies in 10 locations: London, Luxembourg, Frankfurt, Paris, Tokyo, Hong Kong, Bombay, Seoul, Singapore and Sydney, and an extensive network of offices in 23 countries, employing more than 4,000 people.

[edit] Innovative marketing

Fidelity has experimented with innovative marketing techniques directed to the aging baby boomers, recently releasing Never Stop Doing What You Love, a not-for-resale compilation of songs by Paul McCartney, created for Fidelity's employees and clients. The ex-Beatle became the firm's new spokesman in 2005 in a campaign entitled "This Is Paul." On the day of the disc's release, company employees were treated to a special recorded message by Paul himself informing them that "Fidelity and [he] have a lot in common" and urging them to "never stop doing what you love".^[1]

[edit] Competitors

[edit] See also

List of mutual-fund families

[edit] References

^ Jenn Abelson, Brand on the run: Struggling Fidelity turns to ex-Beatle to lure boomers." Boston Globe, September 8, 2005, [1], accessed on August 16, 2006.