Fidelity parent posts 4.6% rise in operating income

FILE PHOTO: A Fidelity Investments store logo is pictured on a building in Boca Raton, Florida March 19, 2016. REUTERS/Carlo Allegri/File Photo

NEW YORK (Reuters) - Fund manager Fidelity’s parent FMR LLC said on Tuesday that operating income rose 4.6% in 2020 as millions of individual customers opened accounts and the company cut expenses in a year of market volatility spurred by the coronavirus pandemic.

For the year, operating income rose to $7.2 billion from $6.9 billion a year earlier, the closely held company said in a shareholder update.

FMR reported revenue of $21 billion, little changed from $20.9 billion a year earlier, while operating expenses fell 2.1% to $13.8 billion.

“Fidelity, like many other financial services companies, experienced dramatic increases in call volumes, digital engagement, and daily trading volume,” Fidelity Chairman and CEO Abigail Johnson wrote in a letter accompanying the shareholder update.

Johnson said millions of new customers opened accounts.

Fidelity reported that the number of its workplace participant accounts rose 7.9% to 32.6 million, while its retail accounts rose 17.1% to 26 million.

The company, whose asset management arm runs funds such as Contrafund and Magellan, said assets under administration closed at $9.8 trillion, up 17.9% year over year.

After Fidelity announced zero-commission trades in late 2019, its personal investing division had a record number of trades in 2020, with daily average trades at 1.4 million, up 164% versus 2019.

In the letter, the company said that Fidelity Capital Markets, Fidelity’s institutional trading arm, handled unprecedented transaction volumes, with more than 1 billion shares traded on several days in March as fears of the pandemic’s toll gripped investors.

Reporting by Lewis Krauskopf; Editing by Lisa Shumaker