Personalization and planning are in, while money management is out: Executive Director of Fidelity

 

What You Should Know:

• According to Fidelity research, investors increasingly want their advisors to spend more time on financial planning rather than managing their money.
• One of Fidelity's key areas of focus is personalization through digital engagement practises.
• According to Edward Jones CEO Ken Cella, the company is focused on being human-first, but technology plays an important role.
• According to Michael Durbin, president of Fidelity Institutional, investors are increasingly demanding more personalization and for their advisors to spend more time on financial planning rather than managing their money.

He said Thursday at the Securities Industry and Financial Markets Association's Private Client Conference in Aventura, Florida, that "the era of personalization is here and it's not going away."

During a panel discussion on "Priorities for Private Wealth Management," he said, "We think the capability is coming fast and furious, and fairly cheaply in order to do it," noting that personalization through digital engagement practises is a key area Fidelity is focused on."

Advisors today have access to "amazing technology and innovation," according to Durbin, who chairs the SIFMA board's Private Client Wealth Management Subcommitte. Artificial intelligence, for example, can help advisors gain insights from all of the data available.

He noted that the number of investors in the United States has surpassed 65 million (and is expected to continue to rise).

"As an industry, we really want to push our goal of serving more households in a more personalised way," he said. "We must embrace these digital engagement practises, and the good news is that the capability is becoming increasingly available." Every day, we see it in our consumer lives outside of financial services."

"We're not going to drive further adoption of financial services through American households if it's always going to be led by the local human advisor in the local branch office," he warned. By the way, it's a fantastic channel. It's essential to our industry's survival. But, if we truly want to achieve our goal of financial inclusion and penetration, we'll have to rely on technology."

Meanwhile, according to Fidelity's own research, while older investors (babies and older) place the highest value on advisors managing their money, "they also say their advisor is spending too much time on managing the money and, in fact, they want help on other elements of advice, which is where the younger generations put the premium," he said.

Financial planning, assisting clients in achieving "peace of mind," and assisting them in aligning their beliefs with responsible investing and capitalism are among the other areas in which clients want their advisors to spend more time, he added.

The rising demand for digital assets, in addition to personalization, is another major trend now, according to Durbin. He claims that digital asset adoption is "retail-consumer led."

When it comes to crypto, however, "there is not yet clarity across the industry," he said. He noted that the securities and exchange commission is relying on the SEC to provide such clarity.

On or around April 21, Fidelity will begin listing a Crypto Industry and Digital Payments ETF (FDIG), the company announced Tuesday. However, the new ETF does not give investors direct access to cryptocurrency.

One of the first asset managers to engage with cryptocurrencies was Fidelity. In 2020, the firm launched the Wise Origin Bitcoin Index Fund I, which is only open to qualified investors with a minimum investment of $100,000.

In March 2021, Fidelity filed an application with the Securities and Exchange Commission (SEC) to launch a Bitcoin ETF, joining a growing number of other, albeit smaller, firms that had done so.

The Wise Origin Bitcoin Trust, according to the March 2021 filing, would track the performance of Bitcoin as measured by the Fidelity Bitcoin Index PR.

The SEC, like previous spot Bitcoin ETFs before it, rejected Fidelity's application to trade the Wise Origin Bitcoin Trust in January, citing concerns that the ETF design could not prevent potential fraud or manipulation, posing a risk to investors and the public interest.