Fidelity hits staggering $12.6 trillion in 2023, bids adieu to headhunted retail chief, beats Schwab's performance -- not least because it doesn't own a bank -- and sees Maggie Serravalli's star shine
Retail was Fido's weakest division with 3% growth and its chief departed; it's B2B units -- 401K and custody/clearing -- jumped 6% each; Serravalli now serves as the company’s chief administrative officer.
3 min readFidelity Investments blew the doors off 2023, with a leap to $12.6 trillion in assets administered and a bound by 12% in financial firm revenue to $28.2 billion – a cool half billion a week, according to its annual report released today.
The Boston giant dwarfs other mega-rivals, like Charles Schwab Corp. and Vanguard Group, both closer to $8.5 trillion. BlackRock, the nearest contender, weighs in at $10.1 trillion.
Fidelity's operating income increased 6% to $8.5 billion, compared to a drop of 1% in 2022 to $8 billion, according to the 2022 annual report.
Unlike many financial firms, Fidelity did not purge staff and finished with about 74,000 employees, up from 68,000 at the end of 2022. See: Fidelity's strategy to own the financial advice business by owning 'a crazy lot of people' is heading for 28,000 hires in two years
Fidelity CEO and chair, Abby Johnson attributes Fidelity's reach – in people, branches, call centers and automation – "to ‘engage’ in volume for its ability to grow its behemoth."
“During 2023, our Investor and Regional Centers engaged in nearly five million customer appointments, and more than 35 million customers engaged with Fidelity digitally,” she wrote in her chairman's letter.
Fidelity's strategy to own the financial advice business by owning 'a crazy lot of people' is heading for 28,000 hires in two years
“Throughout the year, we helped nearly eight million customers create financial plans — both in person and online.”
Getting a lift
Johnson also noted cross-selling, reflected in 10.3 million customers using the services of more than one Fidelity business in 2023, up from 9.2 million in 2022.
Of course, Fidelity also got a lift by engaging with all the third-party intermediaries it supports.
Total clearing and custody accounts – including from RIAs – jumped 6% from 2022. Workplace accounts, including 401(k)s also jumped 6%.
Story Timeline
Retail accounts were the laggards; they grew just 3%.
Executive moves
Joanna Rotenberg is departing Fidelity Investments after only two years, writing that she traveled 20,000 miles and successfully split her retail division into wealth and brokerage units
Near year's end, Fidelity retail chief Joanna Rotenberg departed after a little over two years into her stint. See: Joanna Rotenberg is departing Fidelity Investments after only two years, writing that she traveled 20,000 miles and successfully split her retail division into wealth and brokerage units
Two big semi-lateral moves were announced in concert with the annual report.
Fidelity Chief Financial Officer Maggie Serravalli, 62, became chief administrative officer. She had been CFO since 2020, according to a Wall Street Journal report.
Kevin Barry, former president of Fidelity’s Workplace (namely 401(k) Investing business), took the coveted CFO spot. Sharon Brovelli moved into Barry's role in the 401(k) job, it added.
Contrasting revenue
Fidelity's revenue and income growth contrasted with its rival Schwab.
The Westlake, Texas, giant's revenue was off 9% to $18.9 billion and its net income fell 22%.
Schwab was flogged in part because of a rough year for its bank after an interest spike.
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