Fidelity executive Kathleen Murphy on young investor trends

Early-career professionals are defying the conventional wisdom that young people aren’t thinking about financial planning. Kathleen Murphy, president of personal investing at financial services giant Fidelity Investments, says investors in their 20s and early 30s generally have a proactive attitude about money–though young women still lag their male counterparts when it comes to confidence in investing. Murphy recently spoke with Fast Company editor-in-chief Stephanie Mehta about the role of technology in financial planning and her efforts to bring more young women into the fold. The following interview has been edited for length and clarity.

Fast Company: What you are seeing at Fidelity among younger professionals, and what are their views on money and saving?

Kathleen Murphy: The group that you’re talking about [experienced] 9/11 when they were under 10 years old. Then they lived through the 2008 recession, and now they’re living through another one. We see a lot more engagement in two ways. One is a 53% increase in the number of young customers coming to Fidelity–the growth in our account base has skyrocketed. Secondly, the [young] people who either were existing customers or are new customer clients are engaging with us much more.

They also look at their finances more holistically than other [generations] did. They don’t make the separation between the workplace and what they do in their personal lives. And they’re goal-oriented: What do I want to accomplish? And what path do I want to be on to do that?

FC:What about young women?

KM: I think it’s getting better, but we still see young women professionals being somewhat more risk-averse, somewhat more intimidated by the process. We have taken several steps to help young people in general, and the rules of investing aren’t different for young men professionals versus women, but the way to engage them and to get them confident is a little bit different overall.

FC:What are some examples of ways you’ve tried to make the process more accessible to young women?

KM: With the Fidelity Spire app, the design target was a woman. We’re trying to [get] young people to immerse themselves a little bit more on the fundamentals so that they can take the right steps. I hate to call it a tool because the word “tool” feels so static and boring and it’s much more than that.

We still see this issue with young women professionals being somewhat more risk-averse, somewhat more intimidated by the process than in general.”

You can play around by entering your goals, your priorities, and then get a score [and tips]. There are obviously some rules of the road that we can talk about, but the remarkable thing–I think it’s a good thing–is that they’re more engaged and they are trying to take more control of their financial future than in the past.

FC: Have you found that women are more comfortable with female advisers? And how do you get women to share their investing strategies with their friends the way men often do?

KM: I’m really passionate about this. We’ve done a lot of research in this general area. On the adviser piece, our research would indicate that women don’t necessarily want to specifically talk to a woman as an adviser, but they want to know that the company they’re dealing with values women and the perspectives of women. But fewer than 25% of the financial professionals in this country are women. So I said, “We’re going to start in our branches, where we’re growing and hiring, and we will have a very focused effort on getting more women to Fidelity. And I’m very proud to say that because of the hiring we’ve done in the last, say, four years, 50% of the people that we’ve hired in our branches are women.

And it’s not about being politically correct. It’s about diversity of thought and having a culture where you’re thinking about all the different things you can do to serve different segments of population. Does the ecosystem of the company consciously think about how they show up to the half of the population?

Now, how do we engage women more, not just with us, but with each other? We created a series called “Women Talk Money.” Millions of women are tuning in, and it is very consistent with what we’ve done over the years. There’s a difference in the dialogue. What women are willing to talk about changes dramatically, depending on the environment. It is vitally important for women to feel they’ve got a safe place to ask what they think are stupid questions, but really are not, and that engages them to take action, whatever that action should be for them. Women tend to be more risk-averse, and so what we’re trying to do in these conversations is not decide for them but to help them understand the ramifications [of a conservative strategy].

FC: What role do you think trading apps have played in financial planning interest among this cohort, and do you worry that young people are diving in feet first without an understanding of the basics of investing?

KM: We have not done the things that some competitors have done to encourage treating [investing] like gaming. We provide the education to help them get started. We don’t do things that encourage trading among that, that population, or in general, for that matter. We also have requirements and even some restrictions about who can open an options account, for example. We’ve been at this long enough to know that you do need to put some guardrails around these things to help people help themselves. So we try to take a balanced approach.

FC: What advice would you give to early-career women?

KM: I was doing a webcast for our distribution organization [financial consultants and other associates supporting individual investors], and, because we’re virtual, one of the women had her two teenaged daughters come on and ask: “What’s the best advice you’d give us?” To make it simple, I have the three Cs: Confidence. Have confidence in yourself, and that includes confidence in your financial decisions. Don’t be intimidated. Curiosity. The world is changing so fast with digital capabilities and advancements and new business models. Everything’s changing it at much greater speed. You have to be curious to be relevant as we move forward. The third is courage. Go for it. Too many people hold themselves back or take the safe route. The biggest leaps in my career have been when you had the courage to do something different, including me taking the job at Fidelity 12 years ago.

Written by Investors Wallets

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