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WSJ article on Fidelity
Old 04-08-2015, 11:12 AM   #1
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WSJ article on Fidelity

Here is a link to an article about Abigail Johnson. Abigail took over as CEO of Fidelity in October, a position formerly held by her father. The article talks about her strengths and weaknesses. It will be interesting to see where she takes the company. I am hoping she will expand the number of index funds, but it sounds doubtful for the short term.

Here is an excerpt:

Quote:
Despite the numbers, Ms. Johnson believes investors’ push into passive funds is a temporary trend and will reverse when performance improves, according to executives who are familiar with her thinking. “She believes it’s cyclical,” said Brian Hogan, president of Fidelity’s equity division.
Fidelity Investments’ New Chief Confronts Market Shift - WSJ

The comments were pretty interesting too.
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Old 04-10-2015, 01:57 PM   #2
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Interesting, I just ran across another Fidelity article today:

Fidelity unveils program to help advisers unload unwanted clients

Quote:

Fidelity's Clearing and Custody division is teaming up with registered advisory firm FirstPoint Financial to make it easier for advisers who custody assets on its platform to offload unwanted clients. FirstPoint Financial, a subsidiary of RIA firm Mariner Holdings Inc., will help advisers review individual clients to determine whether those clients are a good match for their practice. If they are not, the adviser may refer those clients to FirstPoint in return for an ongoing referral fee.
A few years ago DH was offered a lump sum upon early retirement, and we visited with several advisors to help us make our decision. Of course, they all wanted 1% of our portfolio each year to manage it. We recently ran the numbers, and by not falling for any one of them, we'll now be able to buy the new (smaller) house we want. Amazing how quickly that 1% adds up.
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Old 04-10-2015, 03:47 PM   #3
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Interesting article.

I can't help but think the CEO is out-of-touch if she thinks the trend towards low cost / passive investing is going to reverse.
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Old 04-10-2015, 04:14 PM   #4
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I'm a FIDO fan for the customer service, and the index funds are ample enough and low enough for me. I found it interesting that Mr. J emphasized the employee digs and keeping them happy. In the times I've called their call centers, it was always a very pleasant experience. I do believe there is a strong correlation between how you treat employees and what you get. As for Ms. J resisting ETFs and index funds, umm, I think she's out of touch. I read the book written about the company, what, about 10 years ago, and found it interesting. I have always beens suspicious of the apparent nepotism in cases like this. Can they in a private company? Sure. Out of the thousands who could be candidates for the position is she the best? Doesn't seem likely.
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Old 04-10-2015, 04:27 PM   #5
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Yes, she may be whistling in the wind.

A recent comment from Morningstar:
Quote:
When we look at the outflows from actively managed U.S. equity funds over the one-year period through early December, roughly $92 billion in assets left actively managed U.S equity funds, and then about $160 billion in new flows went into passively managed U.S. equity products--both traditional index funds and exchange-traded funds. So, this trend appears to be here to stay because we've seen it unfolding over a period of several years, but it's even picking up in pace over the past year.
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Old 04-10-2015, 05:41 PM   #6
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Originally Posted by H2ODude View Post
I'm a FIDO fan for the customer service, and the index funds are ample enough and low enough for me.
I can get cheaper identical ETFs from either Schwab or Vanguard.

1-2 cents on 100 dollars difference makes difference that adds up to big numbers over years.

I am also not too keen on their "pleasant" service. IMO with big account Etrade is place where you get best service.
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Old 04-10-2015, 09:52 PM   #7
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Originally Posted by H2ODude View Post
I'm a FIDO fan for the customer service, and the index funds are ample enough and low enough for me. I found it interesting that Mr. J emphasized the employee digs and keeping them happy. In the times I've called their call centers, it was always a very pleasant experience. I do believe there is a strong correlation between how you treat employees and what you get. As for Ms. J resisting ETFs and index funds, umm, I think she's out of touch. I read the book written about the company, what, about 10 years ago, and found it interesting. I have always beens suspicious of the apparent nepotism in cases like this. Can they in a private company? Sure. Out of the thousands who could be candidates for the position is she the best? Doesn't seem likely.
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Fido administers my mega-corp pension and two 401k's. As I approach ER, I have been exposed to more areas of customer service and I have been very happy with all the reps that I have worked with. Other than a gentle nudges to rollover funds to the in-house products, they have not been pushy at all. Going forward, I expect them to start pushing the actively managed products harder.
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Old 04-11-2015, 09:03 AM   #8
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I'm a FIDO fan for the customer service
We have a Fido store front office a few miles from us. It's convenient to drop by there for various reasons.

Fido also was very helpful a few years back when I was getting my DGM's finances in order. They were happy to consolidate a bunch of old stock certificates she had into an account. A couple of these where from companies that had been merged and there was some leg work involved. It was all done at the local store. So until they screw up something, I like to through a little business their way.

Schwab also has an office in town (downtown) that has proved useful a couple of times. Though this becomes less so over time.

That being said, we keep significant investments in Vanguard, Schwab, eTrade, and Fidelity.
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Old 04-11-2015, 12:53 PM   #9
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Yeah, I was really pleased when they opened up a brick and mortar here in town. Go in rarely, but there have been times when I cannot imagine getting done what was needed over the phone. Like when DS in Tanzania needed $8k wired promptly; simply couldn't be done from there with his US accounts so I went to FIDO store and they did it painlessly.
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Old 04-12-2015, 02:17 PM   #10
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I haven't used Fidelity, so I'm not familiar with their products. But my daughter is planning to set up an IRA and taxable account there, since they administer her company 401(k) and there is a storefront close by. Are you restricted from purchasing Vanguard products in a Fidelity account? I can purchase anything I want in my Schwab and Wells Fargo accounts. Or is trading just more expensive to purchase within a Fidelity account.

Guess I need to read some of the 'Fidelity vs.' everybody else threads ...
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Old 04-12-2015, 02:44 PM   #11
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Originally Posted by shortstop14 View Post
I haven't used Fidelity, so I'm not familiar with their products. But my daughter is planning to set up an IRA and taxable account there, since they administer her company 401(k) and there is a storefront close by. Are you restricted from purchasing Vanguard products in a Fidelity account? I can purchase anything I want in my Schwab and Wells Fargo accounts. Or is trading just more expensive to purchase within a Fidelity account.

Guess I need to read some of the 'Fidelity vs.' everybody else threads ...
You can purchase Vanguard products via Fidelity, although not Admiral shares.
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Old 04-12-2015, 03:27 PM   #12
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Also look at Fidelity's Spartan funds some are close ER to Vanguard. There's also commission free trades on Fidelity ETFs and 70 iShares ETFs.
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Old 04-12-2015, 05:53 PM   #13
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Ah, thanks - that's what I figured, some incentives to use Fidelity ETFs, but all options available.
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Old 04-13-2015, 12:02 AM   #14
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You can purchase Vanguard products via Fidelity, although not Admiral shares.

My wife has a 401k administered by fidelity and the cost to get vanguard funds is very high - I think $75 per transaction. If somebody knows a cheaper way please tell.


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Old 04-13-2015, 06:46 AM   #15
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My wife has a 401k administered by fidelity and the cost to get vanguard funds is very high - I think $75 per transaction. If somebody knows a cheaper way please tell.


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I don't know about inside an IRA, but you might want to consider vanguard equivalent etfs which I believe are $7.95/trade at Fidelity.
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Old 04-13-2015, 09:39 AM   #16
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Thanks. I should double check the fidelity fees but I think I'm stuck with at least the high sell transaction cost.
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Old 04-13-2015, 09:44 AM   #17
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I think Fidelity's $75 charge on Vanguard funds is only to buy them, not to sell them.
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Old 04-13-2015, 09:49 AM   #18
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My wife has a 401k administered by fidelity and the cost to get vanguard funds is very high - I think $75 per transaction. If somebody knows a cheaper way please tell.


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Those funds are not part of the NTF network, ones I've seen, have a $75.00 one way fee(to purchase). Vanguard ETFs should be available for a $7.95 trading fee in both directions.

Check into Fidelity's Spartan index funds or commision free ETF trades.
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Old 04-13-2015, 09:58 AM   #19
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If you invest money in a retirement account through the Fidelity Brokerage Link (example buy Vanguard Wellesley) does the money lose it's legal protection against law suit awards?
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Old 04-13-2015, 10:02 AM   #20
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Ok. You guys have convinced to get out of the vanguard MF (investor class) we have at fidelity and switch into ETFs. Something I was too lazy to look into before.

I did a quick calc it seems like for a fund like VISVX (vanguard small-cap value) the difference in expense ratio (0.24% vs 0.09%) would easily cover transaction costs in no time.
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