Fidelity Announces Changes in Fixed Income Division

Fidelity Asset Management has announced leadership appointments within its Fixed Income Division, which includes the company’s Bond Group and Money Market Group.

These appointments include: 

  • Robert P. Brown has been named president of Fidelity’s Bond Group, succeeding Christopher Sullivan. Brown was previously president of Money Markets from 2009 to 2011. 
  • Nancy D. Prior has been promoted to president of Money Markets, succeeding Brown. Most recently, Prior was a managing director of Credit Research. 
  • Christopher Sullivan has been named head of Institutional Fixed Income, a newly created role. 
  • David E. Hamlin has been promoted to head of Research for Fixed Income, a newly created role. Hamlin was previously a managing director of Credit Research.

Brown joined Fidelity in 1995 as senior research analyst. From 1997 to 1998, he was a senior trader and served as research analyst and corporate bond portfolio manager until 2005. Brown was managing director of Research in the Fixed Income Division from 2005 until he was named president of Money Markets. 

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Before joining Fidelity, Brown was director of Investment Grade Research at Massachusetts Financial Services. He previously worked at Putnam Investments and John Hancock Capital Corporation. 
 

Prior joined Fidelity in 2002 as a senior legal counsel for Fixed Income, eventually rising to senior vice president and deputy general counsel. Most recently, she was a managing director of Credit Research in the Fixed Income Division, where she was responsible for leading a team of research associates in the financial sector.  

Before joining Fidelity, Prior was general counsel at Advantage Schools Inc. and an attorney at Mintz Levin in Boston.

In his new role, Sullivan will be responsible for building Fidelity’s fixed income presence in the institutional market. He will help assess Fidelity’s current fixed income product offerings, while also advising on new product development, the company said.

Working with the distribution team at Pyramis Global Advisors, a Fidelity Investments company, Sullivan also will lead the effort to evaluate non-U.S. fixed income opportunities and help build a long-term, global expansion plan that encompasses regional sales, the development of investment offerings and client service needs.  

Sullivan was president of Fidelity’s Bond Group from 2009 to 2011. Prior to joining Fidelity in 2009, Sullivan was co-head of U.S. Fixed Income for Goldman Sachs Asset Management (GSAM) from 2001 to 2009. Before joining GSAM, Sullivan was an executive vice president of Pacific Investment Management Company (PIMCO), where he was a senior member of their Account Management group from 1997.  
 

Hamlin will lead fixed income research in a newly created role that will centralize Fidelity’s taxable and municipal research efforts for both bonds and money markets.  

From 2009 to 2011, Hamlin was a managing director of Credit Research in the Fixed Income Division, where he was responsible for leading a team of research analysts in the industrial and utility sectors. He also oversaw the build out of Fidelity’s global research team in London. Hamlin joined Fidelity in 2006 as manager of the Quantitative Research group for Fixed Income. Prior to joining Fidelity, Hamlin worked as a senior portfolio manager and the team leader in the Tax Exempt Group for Putnam Investments.  

Before working at Putnam, he spent 12 years at the Vanguard Group, where he was a portfolio manager and a senior member of the team responsible for the hiring and oversight of Vanguard’s external investment managers. In addition, Hamlin was a portfolio manager at PNC Bank and a credit analyst at Continental Bank.

Growth in Hardship Withdrawals Slows

Among plan participants who took some type of savings action during Q3 2011, 72% took a positive action (started or increased contributions), Bank of America Merrill Lynch reported.  

Only 28% of plan participants took a negative action (stopped or decreased contributions) – compared to 67% and 33% during the third quarter of 2010, respectively, according to the Bank of America Merrill Lynch 401(k) Contribution Activities Scorecard for the third quarter.

Kevin Crain, Head of Institutional Retirement & Benefit Services, tells PLANADVISER that the data examines two broad areas: in-plan activity and distribution activity.

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Crain says a positive indicator that the economy is improving is that the ratio between participants taking positive actions versus negative actions continues to get stronger; more people are taking positive steps, while fewer people are taking negative ones.

The other area of analysis, distribution activity, shows a more complex picture.“If you look back at loan activity on a year-over-year basis, there is a pretty steady appreciation on new loan issuances. This year, we’ve seen a decrease in the number of loans issued by 4%.  It’s the first time we’ve seen that statistic not grow since 2007,” says Crain.

Hardship withdrawals continue to rise year-over-year, just at a slower growth rate than in previous years.  This year the growth rate is 8%, says Crain, but in previous years it has been higher.

Crain says overall, the number of participants taking loans or hardship withdrawals is a small minority of the bank’s total number of 401(k) participants; out of about 1.5 million participants, only about 100,000 have taken a loan from their balance, and 27,000 have taken a hardship withdrawal.

BofA provides data from its Retirement & Benefit Plan Services division quarterly, analyzing participant activities within its proprietary 401(k) business, which services approximately $85.8 billion in total plan assets. The data also includes plan sponsors’ adoption of offered products and services designed to encourage greater use of employer-sponsored retirement savings plans.

Key statistics from this quarter's Scorecard include:

  • A 17% year-over-year increase in plan sponsor adoption of BofA’s Advice Access service, which offers saving and investment advice unique to an individual’s personal situation and life stage
  • Since 2007, 22% of plans offering auto enrollment have made one or more design changes to encourage additional positive behaviors among participants, including adding Auto Increase, increasing default contribution rates, and/or expanding their offering to include all eligible employees not participating.
  • Through the first nine months of 2011, new loan issuance transactions decreased by 4% while total amount borrowed stayed relatively the same when both were compared to the same period in 2010. Both of these numbers represent record lows for the first three quarters of the year since 2007, the earliest year data was reviewed for this report.
  • In contrast, through the first nine months, hardship withdrawals and the total amount distributed were up 8% and 2% respectively over the same period in 2010. Both numbers represent record highs for the first three quarters of the year since 2007.

 

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