Fidelity swells to $9.8T, despite losing massive BD client

Fidelity Investments, already a giant in financial services, is even bigger a year after the start of the coronavirus pandemic.

The firm ended 2020 with thousands of new employees, millions of new accounts and billions more in assets — growth driven in part by a wave of first-time investors, who have sent markets soaring and boosted business to record levels retail brokerages.

At Fidelity, assets swelled 17.9% year-over-year to reach $9.8 trillion at the end of December. The firm picked up 10,500 new employees last year, raising total headcount to approximately 47,000 (6,100 of the new staff members are in U.S. client-facing roles). And retail accounts at the company grew by 17.1% clients, for a total of 26 million accounts.

Fidelity operates across the employee benefits, asset management, wealth management and custody sectors.

Rival firms including Robinhood, Charles Schwab and E-Trade have had record growth and stock trading on their platforms. That activity has carried on into 2021. Morgan Stanley, which owns E-Trade, said self-directed investors have opened more new accounts at the firm in 2021 than in the third and fourth quarters combined.

However, not all divisions at Fidelity grew in 2020. The private financial company lost a “large broker-dealer” client on its clearing platform due to an acquisition, according to a footnote on its financial results summary. This departure propelled the number of accounts on the clearing platform to shrink by 10% in 2020, according to the company. It otherwise would have grown by 6%.

While the footnote did not specify which client had left Fidelity’s clearing platform, Schwab closed its deal for USAA’s 1.1 million brokerage accounts in May. USAA had used Fidelity as its clearing platform, according to FINRA BrokerCheck.

A Fidelity spokeswoman said it wouldn’t comment on client relationships.

There were an average of 2.3 million trades a day on Fidelity’s platform in 2020 — a 97% increase from 2019, according to the company. The company’s wealth management platform, including its private offering for high-net-worth clients, now boasts $1.4 trillion in client assets.

Fidelity Institutional, which serves firms including hedge funds, broker-dealers and RIAs, as well as offering trading services investment products, now hosts $3.5 trillion in client assets.