Fidelity, which manages $1,500 billion globally, has seen its fund business decline to generate less than half its revenue, a trend it expec...

Fidelity, which manages $1,500 billion globally, has seen its fund business decline to generate less than half its revenue, a trend it expects to continue, according to a report in the Financial Times. Bob Reynolds, Fidelity’s chief operating officer, told the FT that Fidelity now generates more than half its revenue from processing and administration of payroll, health and retirement plans, a low-margin but high growth business. Fidelity began to diversify its activities after being overtaken in size by rivals, Capital Group’s American Funds and Vanguard. Its inflows are currently in fourth place, behind Barclays Global Investors, at $11 billion, despite improved performance this year, according to the report. As further proof of this diversification the group’s brokerage business has recently overtaken Merrill Lynch to become the biggest in the US having hired 90 analysts in the past year, doubling its research staff, restructuring the unit and setting up a new arm to manage institutional money.