Fidelity executive leading $3.6 trillion Personal Investing group retires

Kathleen Murphy, president of Fidelity Investments’ $3.6 trillion Personal Investing division, is retiring at 57 and expected to leave her post by midyear, the company confirmed Friday.

Murphy, who has been leading the division for 12 years, was not available for comment, but is apparently departing on good terms.

“After some time off, Kathy has agreed to return to help [CEO] Abby Johnson and other leaders focus on key strategic priorities important to the long-term future of Fidelity,” said company spokesman Jeff Cathie.

Murphy is not expected to return to Fidelity on a full-time basis, Cathie said.

Murphy’s impending departure, which was announced by Johnson late Thursday in an internal memo to Fidelity employees, introduces a potential leadership gap in a division that has been “impactful on the industry,” said Morningstar analyst Robby Greengold.

“She played a key role in Fidelity's development and launch in 2018 of the firm's suite of index funds that have a zero-expense ratio,” Greengold said. “Each [fund in the suite] has consistently gathered net inflows since inception. Collectively, they now hold over $13 billion in assets. The business unit also improved its value proposition to retail investors by eliminating investment minimums, account minimums, account fees, and domestic money movement fees.”

The division under Murphy’s leadership also played a significant part in helping to drive down the cost of trading commissions for stocks, options and exchange-traded funds.

During Murphy’s tenure as president of the division, she helped produce successive years of record growth that led to client accounts more than doubling, to 26 million from 12 million, and client assets under advisement quadrupling, to more than $3.6 trillion from $916 billion.

That growth continued to accelerate in 2020 as Personal Investing added 5.1 million new accounts, representing a 60% increase year-over-year, and client assets grew by $600 billion, a 20% increase year-over-year.

Fidelity’s Personal Investing division currently includes more than 18,000 associates.

“The Personal Investing division has built a strong financial ecosystem helping educate retail investors about stocks, ETFs and mutual funds, and continuing to use its scale and innovate with new tools and services,” said Todd Rosenbluth, director of mutual fund and ETF research at CFRA.

“But competition remains high and customer loyalty is not guaranteed,” Rosenbluth added, emphasizing the importance of finding the right successor for the job.

Johnson’s memo to Fidelity employees recognized Murphy for her many contributions, especially since the start of the global pandemic.

“This past year has reminded us of the importance of the values and principles that have guided our way for decades — doing right by the customer, meeting their full range of needs, creating new ways to deliver value, and fostering a workplace culture that inspires our associates’ best work. For the past 12 years, Kathy Murphy has embodied these principles. Now, after more than a decade as head of Personal Investing, Kathy has decided to retire from her position around mid-year,” the memo reads in part.

“Kathy played a key leadership role in several important cross-company initiatives, including our firm-wide advisory solutions growth strategy, our lifetime engagement efforts across our Personal Investing and Workplace Investing divisions, and our broad-based digital transformation efforts. This past year, Kathy helped to steer Fidelity through a global pandemic while remaining steadfast in our commitment to our clients and associates. For me personally, I will miss Kathy’s leadership, passion, energy and relentless will to innovate and improve,” the memo continues.

Cathie said Johnson will work closely with the Fidelity senior leadership in the coming months to name a successor.