The video's assessment of Abigail Johnson and her contribution to the company is not exactly accurate. They basically summarized her attempt to oust her father in 2004 as nonsensical given it was her father who grew the company into what was, and her only feats since taking over are crypto focused.
The argument that because someone started a company and grew it, therefore they should remain in charge does not hold water. Look at the fund expense ratios before and after Abigail took over Fidelity. Fidelity funds were, and largely still are, mostly relatively high expense funds when compared in the aggregate to competitors. At least under Abigail's tenure Fidelity has introduced several low, and zero, expense funds. It can be deduced that her father was indeed out of touch with where the playing field was going.
Regarding the crypto push, she has moved in that direction but that is definitely not her crowning "achievement" or what she will be remembered for. She has largely turned Fidelity around from being a stodgy, expensive broker into the top pick for new and younger investors. Almost every new investor I know starts with Robhinhood or something similar then graduates to Fidelity. The constant push for innovation and accommodating the needs of the demographics cannot be understated. Offering fractional shares before other similar sized brokerages and automatic investments into ETFs are attractive features, especially to new investors. Had Fidelity not made changes I can easily see it being today what Merrill E*Trade are: perfectly perfunctory, nothing special, and nobody's first pick.
I don't use Fidelity, but you can't argue with results. The video seemed to lack a lot of context and nuance.
With all that said, a family owned company of that size does come with its own set of problems. It's not a matter of if, but when, a not-so-stellar Johnson will run the company. As Buffett likes to say, "a good company should be idiot-proof because one day it will be run by an idiot" or something along those lines.
The argument that because someone started a company and grew it, therefore they should remain in charge does not hold water. Look at the fund expense ratios before and after Abigail took over Fidelity. Fidelity funds were, and largely still are, mostly relatively high expense funds when compared in the aggregate to competitors. At least under Abigail's tenure Fidelity has introduced several low, and zero, expense funds. It can be deduced that her father was indeed out of touch with where the playing field was going.
Regarding the crypto push, she has moved in that direction but that is definitely not her crowning "achievement" or what she will be remembered for. She has largely turned Fidelity around from being a stodgy, expensive broker into the top pick for new and younger investors. Almost every new investor I know starts with Robhinhood or something similar then graduates to Fidelity. The constant push for innovation and accommodating the needs of the demographics cannot be understated. Offering fractional shares before other similar sized brokerages and automatic investments into ETFs are attractive features, especially to new investors. Had Fidelity not made changes I can easily see it being today what Merrill E*Trade are: perfectly perfunctory, nothing special, and nobody's first pick.
I don't use Fidelity, but you can't argue with results. The video seemed to lack a lot of context and nuance.
With all that said, a family owned company of that size does come with its own set of problems. It's not a matter of if, but when, a not-so-stellar Johnson will run the company. As Buffett likes to say, "a good company should be idiot-proof because one day it will be run by an idiot" or something along those lines.
Statistics: Posted by observe_and_judge — Wed Jun 12, 2024 5:05 am — Replies 21 — Views 1708