Money Management Is Out, Personalization and Planning Are In: Fidelity Exec

What You Need to Know

Investors increasingly want their advisors to spend more time on financial planning than managing their money, according to Fidelity research.
Personalization through digital engagement practices is one of the key areas that Fidelity is focused on.
Edward Jones is focused on being human-first, but there is a very important role for technology, exec Ken Cella says.

Investors increasingly want more personalization and for their advisors to spend more time on financial planning than managing their money, according to Michael Durbin, president of Fidelity Institutional.

“I think the era of personalization is here and it’s not going to go away,” he said Thursday at the Securities Industry and Financial Markets Association’s Private Client Conference in Aventura, Florida.

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

There is “amazing technology and innovation” available to advisors today, said Durbin, who is chair of the SIFMA board’s Private Client Wealth Management Subcommittee. Advisors, for instance, can use artificial intelligence to gain insights from all the data available.

The U.S. investor population has reached 65 million (and is hopefully still growing), he noted.

“As an industry, we really want to drive our aspiration to serve more households [in] an increasingly personalized way,” he said. “We have to embrace these digital engagement practices and the good news is the capability increasingly is there. We see it in our consumer life outside of financial services every single day.”

But he warned: “The reality is we’re not going to drive further adoption of financial services through American households if it’s only ever going to be led by the local human advisor in the local branch office. It’s a fantastic channel, by the way. It’s the lifeblood of our industry. But if we really want to get this aspiration of financial inclusion and penetration it’s going to have to be done through technology.”

Fidelity’s own research, meanwhile, has shown that although older investors (boomers and older) value advisors managing their money the most, “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.

Those other areas in which clients want their advisors to spend more time include financial planning, helping them achieve “peace of mind,” and helping them to match their beliefs with responsible investing and capitalism, he added.

No Crypto Clarity

In addition to personalization, the other major trend now is rising demand for digital assets, Durbin said. Digital asset adoption is happening and is “retail-consumer led,” he said.

But “there is not clarity across the industry yet” when it comes to crypto, he said. The industry is counting on the Securities and Exchange Commission to provide such clarity, he pointed out.

Fidelity will start listing a Crypto Industry and Digital Payments ETF (FDIG) on or about April 21, it said Tuesday. But the new ETF doesn’t provide investors with direct exposure to cryptocurrency.

Fidelity was one of the first asset managers to engage with cryptocurrencies. The firm introduced the Wise Origin Bitcoin Index Fund I in 2020, available only to qualified investors with a minimum $100,000 investment.

Fidelity filed an application with the SEC in March 2021 to launch a Bitcoin ETF, joining a growing number of other, though smaller, firms that had done the same.

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

But the SEC rejected Fidelity’s application to trade the Wise Origin Bitcoin Trust in January, just as the agency had rejected prior spot Bitcoin ETFs before it, based on concerns that the ETF design could not prevent potential fraud or manipulation and could therefore pose a threat to investors and the public interest.