Fidelity Investments, the Boston-based investment behemoth bent on world domination, announced last week that new defined contribution retirement plan sales totaled $35 billion over the first half of 2015, plus $21 billion in commitments for 2016.
The company said sales for the first six months of 2015 included plans of all sizes, ranging from large corporations to tax-exempt employers, and emerging companies that often leverage advisors in their selection process. In total, plans sold in 2015 represent nearly 800 employers with 700,000 employees.
“Our singular focus on delivering an outstanding customer experience has created new business opportunities for Fidelity, especially in the smaller end of the market where we won more than $8 billion in sales already this year,” Jim MacDonald, president of workplace investing for Fidelity, said in a statement.
The firm added that it works closely with financial advisors whose “insights help guide employers in their provider choice.” As a result, the company claims, Airbnb, NerdWallet, eSilicon and Prysm, each emerging companies in Silicon Valley, chose Fidelity. Fidelity also won business from tax-exempt health care institutions Allegiance Health, based in Jackson, Mich. and UnityPoint Health of West Des Moines, Iowa.
“We appreciate the continued confidence our current clients have in our people, service and products,” MacDonald continued. “This trust was demonstrated in our ability to retain 99 percent of our business as of the mid-year mark.”
Clients representing more than $100 billion in assets under administration extended their relationship with Fidelity and include Delta Airlines, General Motors, Halliburton, Amway, Wolters Kluwer, Synopsys, First American Financial Corporation and Marshfield Clinic, the largest private group medical practice in Wisconsin.
In addition, Blue Cross and Blue Shield of Minnesota and University of Vermont Medical Center deepened their relationship by adding Portfolio Advisory Services, Fidelity’s workplace managed account solution.
Umbrella Effect: More Clients Seeking One Provider for Multiple Benefits
Fidelity notes companies are increasingly seeking a provider that can deliver multiple benefits on one platform. Many Fidelity clients now offer high-deductible health plans with health savings accounts as a complement to their 401(k).
“This combination makes for a powerful savings opportunity for employees, including helping them prepare for the escalating health care expenses they may face in retirement. Companies are also incorporating managed accounts and company stock plans onto the same platform as their workplace savings plan. This integration offers benefit teams simplified administration from a single provider, enabling them to better support the needs of today’s evolving workforce.”
Fidelity’s currently has assets under administration of $5.2 trillion, including managed assets of $2.1 trillion as of June 30.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
