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Fidelity reorganizes units
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November 4, 1997: 7:57 a.m. ET
Company overhauls sales operations; names Burkhead to lead new unit
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NEW YORK (CNNfn) - Fidelity Investments is revamping its mutual fund sales and discount brokerage operations and put Vice Chairman J. Gary Burkhead in charge of both businesses.
Fidelity made the moves Monday as it continues efforts to counter a decline in market share for its mutual funds. The reorganization unites the firm's retail fund business and brokerage operations for the first time.
The redesign is intended to exploit one bright spot for Fidelity: its discount brokerage business and mutual-fund supermarket, which sells funds from a variety of companies. Both have cut into the market share of sector leader Charles Schwab & Co.
According to published reports, Fidelity's retail customers won't see any immediate changes, but will likely see more programs designed to make Fidelity a one-stop destination for asset management.
Burkhead's appointment comes a little more than six months after he was replaced as the head of Fidelity's mutual-funds investment operation by Robert Pozen, then the company's general counsel.
Burkhead will assume some of the responsibilities formally handled by Paul Hondros, who resigned in September as head of Fidelity's retail operations to join Pilgrim Baxter & Associates, managers of the PBHG fund family, as its president and chief operating officer.
He will assume Hondros' former duties and also supervise Fidelity's branch offices and brokerage businesses. The group manages $240 billion in mutual fund assets and $300 billion in brokerage account funds.
Fidelity's vice chairman and chief operating officer James C. Curvey told The Wall Street Journal the combination of its retail fund and brokerage business meets his goal to simplify Fidelity's business structure.
Fidelity said Robert Reynolds would continue to lead its Institutional Retirement Group, which provides corporate retirement products and services, including 401(k) retirement programs. The unit manages $240 billion in assets for 5.3 million customers and 17,500 corporate retirement sponsors.
Fidelity also named Kevin Kelly, president of its Canadian operations, to oversee its Financial Intermediary Services group. That group markets the Fidelity Advisor funds.
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