Fidelity Internal Information

Attracting the Millennial with Investep

Caitlin Cassidy, Scott Bryant, Arman Rahman, Chris Santos and Ciara Morley

Summer 2015

Young Investor Confidence in Financial Knowledge

Opportunity

“While Boomers hold the bulk of the nation’s

wealth today, there is a significant wealth shift

looming -- a transfer of a projected $1 trillion from the Boomer generation

to Gen X andGen Y -- every year for

the next 40 years.”

— Michael Durbin, President, Fidelity Institutional Wealth Services;

2013 Fidelity Poll: Innovating for the Future

2 Fidelity Internal InformationLiersch, Michael. MILLENNIALS AND MONEY (n.d.): n. pag. Merrill Lynch Private Banking & Investment Group. Web.

19%

56%

19%

High

Moderate

Low

Self-Directed Tendencies

3 Fidelity Internal Information

Reward

IndependenceWith a RoboAdvisor

With Group Portfolio Creation ToolsTo make investing a life-long habitEducation

Our Proposed Product

RoboAdvisors: Independence

User Advantages•Minimal to no human intervention

•Much lower minimum initial investment

•Accessible at any time

Company Advantages•Low employee costs

•Low capital and administrative costs

•Much larger customer base, many first-time investors

4 Fidelity Internal Information

• Goal: Make investing more accessible through automation • RoboAdvisors: Provide automated portfolio management online

• Same algorithms used by the traditional advisory community• Suggest different diversified portfolios based on user questionnaire

Picture: http://www.nytimes.com/2014/04/12/your-money/start-ups-offer-financial-advice-to-people-who-arent-rich.html

Group Portfolio Creation: Education

• Invite-only collaboration with friends and coworkers

• Virtual portfolio: starts with no personal money invested

• Track performance

• Option to invest personal money in personal portfolio or a top 5 portfolio

5 Fidelity Internal Information

Customer Incentives: Reward

6 Fidelity Internal Information

• $10 from Fidelity added to accountFirst Investment

• $50 gift cardTotal Investment of $2,000

• $100 from Fidelity added to accountActive Account for 12 Months

• $10 from Fidelity added to account of each group member

Three Portfolios Created

• $100 to invest in that portfolio to each group memberTop 5 Portfolio

Individual Rewards

Group Portfolio Rewards

Concerns for Fidelity

7 Fidelity Internal Information

Will there be significant profit from the Gen Y demographic?

Is there enough interest in this smaller market?

Young clients are a long-term investment to gain Fidelity customers for life.

“Just 18% of financial advisors are targeting Generation Y clients.”

-- Leslie Kramer, Investopedia

Drayer, Leah. “Millennials Investing Future”. Issuer Direct. Issuer Direct Corporation, 30 Jan 2015. Web. 28 Jul 2015.Kramer, Leslie. “Financial Advisors Need to Seek Out This Group NOW.” Investopedia. Investopedia, LLC, 26 Aug 2014. Web. 28 Jul 2015.Siciliano, John. “Millennials and their impact on the investment management industry: Innovators in investing.” Asset Management Blog. PwC, 6 Nov 2014. Web. 28 Jul 2015.

“The younger generation are taking financial planning more seriously and

starting to save at an earlier age.”--John Siciliano, PwC Managing Director, Asset Management Advisory and Global Strategy Lead

Growing Wealth

Doubts about Social Security

Increasingly Technology-Driven Investment Landscape

Conclusion

8 Fidelity Internal Information

MillennialsHabit-Formation

Win-Win