Fidelity Investments said operating profit jumped 13% last year as the individual investing boom and stock market rally lifted the money management giant’s revenue to a record .
FMR LLC, Fidelity’s parent company, posted operating income of $8.1 billion, compared to $7.2 billion in 2020, the company said in its annual shareholder update on Wednesday. It was the sixth consecutive year of record profits for the company, which is privately owned and controlled by the Johnson family. Revenue climbed 15% to $24 billion.
Fidelity, long known for its stable of star stock pickers and the mutual funds they manage, has remade itself in recent years as a gateway to Wall Street for millions of individual investors. The company turned to its brokerage, retirement account and independent advisor platforms, investments that paid off when many Americans began to trade more actively during the pandemic.
Last year started with the unexpected meme stock craze, in which legions of individual investors flocked to Reddit’s investment forums to rally around unannounced stocks like GameStop. Inc.
and AMC Entertainment Inc.,
and ended with the S&P 500 index up 27%. The benchmark closed at a record 70 times in 2021, but soaring consumer prices, higher interest rate expectations and Russia’s invasion of Ukraine sent stocks plunging. shares this year.
Assets under administration, or what’s in Fidelity accounts as well as Fidelity funds held by competitors’ customers, grew 20% to $11.78 trillion in 2021. company, or the amount overseen by Fidelity funds, totaled $4.48 trillion, up from $3.8 trillion a year earlier.
Net inflows into Fidelity funds totaled $191 billion, with new client funds exceeding withdrawals in managed accounts as well as index and multi-asset products.
The company ended 2021 with 32.4 million retail customer accounts, an increase of 22% over the previous year.
Fidelity has responded by adding 16,600 employees in 2021. Nearly 80% of new hires are in call centers, branches and other customer-facing positions. The company’s workforce exceeded 60,000 by the end of the year.
Like many of its peers in the brokerage industry, Fidelity had struggled at times in 2020 to manage the influx of traffic on its systems and in customer inquiries, and that continued into the past year.
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