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Fidelity Assets Under Management (AUM)

Fidelity Investments total assets under management. Fidelity AUM for 2017: client assets, brokerage accounts, mutual funds.

Fidelity Investments Assets Under Management (AUM)

Fidelity Investments has a long history of satisfying its customers, which is probably one reason it’s one of the biggest brokerage houses in the United States. The firm is the largest record keeper of 401(k) plans, and one of the largest providers of 403(b) plans for non-profit organizations. More than 22,000 companies trust Fidelity to provide its employees defined-contribution and defined-benefit plans. The broker also provides stock plan services.

The company’s operations generate very large assets in its coffers. In particular, Fidelity has the following impressive numbers:

Fidelity total client assets $5.7 trillion
Fidelity brokerage accounts 24.3 million
Assets in Fidelity mutual funds $1.9 trillion
Other Fidelity assets under management $264 billion

Obviously, this is an enormous broker-dealer. Fidelity’s clients make more than 500,000 commissionable trades in an average market day. At $4.95 per transaction, this translates into roughly $2.5 million in gross revenue per day, just from trading fees.

Fidelity has about 26 million individual clients. Many of these investors make their own trading decisions. Approximately $3.6 trillion of broker’s client assets are in non-managed accounts and funds.

In 2016, Fidelity experienced its most profitable year ever. It had a record-breaking $15.9 billion in revenue. This produced $3.5 billion in operating income. For a privately-held company, that’s a lot of cash.

Adding all of Fidelity’s mutual and exchange-traded funds to the non-Fidelity branded assets that are managed by Fidelity produces a total of around $2.13 trillion, an increase of 4.7% from 2016. The managed securities typically include funds, equities, bonds, and money market instruments.

A large percentage of Fidelity’s business comes from retirement services. In fact, about $3.1 trillion of Fidelity assets are in retirement accounts. Of these, about $1.3 trillion are managed by Fidelity investment advisors. Over 60% of Fidelity mutual funds are in retirement accounts. Nearly $1.9 trillion is invested in the company’s mutual funds. There were roughly $57 billion in withdrawals from actively-managed funds in 2016.

Despite its large size, Fidelity’s retirement operation is actually growing. Its 401(k) business saw healthy expansion in 2016, and the broker remains America’s biggest provider of IRA’s. The company oversees more than 27 million workplace retirement plans, and nearly 9 million household accounts.

In addition to deep pockets, Fidelity also has a very large workforce. The company employs more than 45,000 people around the world, including 5,000 in Boston alone.

Benefits of a Large Firm

Choosing a large broker-dealer over a small one has several advantages. The one that seems most salient is the high volume of trades that large firms have. Because Fidelity has so many clients placing a large number of trades every day the market is open, it can afford to lower its commission and still be profitable.

The company recently reduced its equity commission from $7.95 to $4.95. Small firms would have a hard time staying in business at that price. But Fidelity is able to survive and even profit with its high trading volume.

Overview of Fidelity Investments

The firm has bullish and bearish indicators in the following areas:

Fidelity offers excellent banking features. A unique account called the Cash Management Account comes with checks and a Visa debit card at no cost to the account holder. Even better, the broker reimburses all ATM fees. Technically, the Cash Management Account is a brokerage account, and securities can be traded in it. However, margin is not available.

Fidelity is known for its great customer service, which operates 24 hours a day, 7 days a week. The website has a chat function, and the company provides phone numbers for customers who travel outside the U.S. There are also brick-and-mortar Fidelity locations in multiple U.S. states.

Continue to Fidelity Review »

Updated on 4/19/2017.

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