BM: Fidelity was late to the index-fund game, but it’s come on strong. Do you think there’s any challenge to saying, “We’re somebody who will sell you both active and passive funds”?
AJ: Over the last however-many decades, we’ve learned a lot about what it takes to be really good in active management.
What it takes to be great in index investing is really two things. It’s low or, now, no fees and really great service, and so that’s what we’re doing. From a customer perspective, I can understand they’re looking at index investing and active investing as two things on the same shelf. From the point of view of running the business, they’re very different in terms of what you have to do.
I don’t have any problem with that at all. If we decide to do something, I want to be really good at it, so that’s what we’re going to go do.
BM: Fidelity about a year ago had some sexual-harassment issues internally. Abby, you actually spoke about it. You’re certainly the top woman leader in asset management. What is one of the things you’ve learned in all of the discussions and meetings that you’ve had about this over the past year?
AJ: It’s so complicated. It’s hard to know where to begin. It was pleasantly surprising to see the amount of positive energy. People really felt concerned and had a desire to create some change.
KM: For me, both personally and professionally over the course of the last year, the discussion about unconscious bias has been very helpful and productive.
For example, we’ve had an effort over the last three years or so or longer to increase the diversity in our branches. This year half of the new hires in our branches are women, and that’s in an industry where less than 25 percent of licensed professionals are women.
That required a talk with a lot of male managers about how we hire and how you interview and who you gravitate towards. It’s not conscious, it’s just that you’re comfortable with what you know. We’ve also done it in what we call our Leap program, which is for younger technologists, and so half of the new technologists in this Leap program are women as well. What will attract more women? Flexibility. We really don’t care when someone comes to work and when they leave, as long as they’re doing their job. Give them the laptop so they can work at home, that kind of stuff. That doesn’t just benefit women—these policies benefit everybody. Men want to go to their kid’s soccer game as much as the woman does, right?
AJ: When I started in the industry, it was just expected: You want to be in this business, you’ve got to be around when the markets open. Technology has helped us to change that a lot.