Banks

BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

Continue Reading

Economy

Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

Continue Reading

Currencies

Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

Continue Reading

Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

Continue Reading

Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

Continue Reading

Categorized | Financial

Abigail Johnson succeeds father as Fidelity chairman


Posted on November 21, 2016

Fidelity chairman Ned Johnson, who has run the Boston-based financial group for the past 39 years, is turning over his last remaining responsibilities to his daughter, Abigail, putting her in full control of the family-owned company.

Ms Johnson will add the title of chairman to that of chief executive, which she took in 2014 when she assumed responsibility for day-to-day operations.

Her accession, announced in a memo to staff on Monday, comes as Fidelity faces an increasingly competitive landscape for retirement savings and continuing challenges in its historic asset management division.

The company oversees $5.5tn through retirement plans and brokerage accounts and, in the case of $2.1tn, in Fidelity’s own investment products such as mutual funds.

“While we have enjoyed much success, evolving customer preferences and new regulatory requirements are transforming the investment management industry,” Mr Johnson wrote in the memo, a copy of which was seen by the Financial Times.

“However, we are prepared to seize the opportunities in this changing competitive landscape … This expansion of responsibilities is a natural progression of Abby’s 28-year career at Fidelity, in which she has taken on increasingly more challenging and complex roles.”

Mr Johnson’s retirement as chairman is the final act in a long and carefully choreographed transfer of power. Ms Johnson began her career as an equity research analyst at the company and worked her way up through a series of executive roles including head of the asset management division and chair of its international operations.

“Abby has been running the place for many years, but this is the end of an era, as significant as Jack Bogle stepping down from Vanguard,” said Jim Lowell, editor of the independent newsletter Fidelity Investor.

Under Mr Johnson, whose father founded Fidelity in 1949, the company popularised the use of mutual funds by retail investors, particularly those run by star investment managers. In later years he expanded the company into running brokerage accounts that could include other companies’ investment products, and then into retirement plans.

Ms Johnson, meanwhile, has stepped up investments in technology and focused on building relationships with advisers and consultants — investments that last year crimped operating profits, which fell to $3.2bn from $3.4bn in 2014.

The company was able to boast a return to inflows at its asset management business in 2015, but its lucrative actively managed funds continue to lose market share to lower-cost passive investment vehicles.

Fidelity, the largest administrator of retirement savings plans in the US, argued against the Obama administration’s “fiduciary rule” that sets out how retirement advisers must prioritise a customer’s best interests. The future of the rule has been thrown into doubt by the election of Donald Trump, whose advisers the measure should be delayed and modified or scrapped.