Chris McDermottCFP and SVP, Product ManagementFidelity Investments

September 9, 2012

*Trends Affecting Today’s Investor

Technology Leadership and

Innovation

Private Ownership and Financial

Strength

Integrity and Reputation

Investor Advocacy Open Architecture

PERSONAL INVESTING

• No. 1 provider of IRAs2

• 13.5 million customer accounts

• Major brokerage firm

INSTITUTIONAL• 5,000 financial

intermediary clients

•Broker/dealers

•Insurers

•Independent advisors

•Family offices

WORKPLACE SAVINGS

• No. 1 provider of 401(k) plans3

• 14.5 million DC participants

• Major provider of stock plan services and health & welfare plans

ASSET MANAGEMENT

• $1.5 trillion under management1

• Equity, fixed income and asset allocation

• Pyramis Global Advisors

• Global staff and client base

1 As of 12/31/2011.2 Cerulli Associates, The Cerulli Edge Retirement Edition, First Quarter 2011. Based on an industry survey of

firms reporting total IRA Assets Administered for Q3 2010.3 Workplace defined contribution data is based on more than 20,000 plans and 11.9 million recordkept participants as of June

30, 2012, and excludes tax-exempt market plans. The analysis is based on qualified plans and includes data from Fidelity Advisor 401(k) Program.

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Fidelity Investments: Who are we?

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Over a decade of difficult market conditions

Economy, fiscal policy & demographic trends providing headwinds

What does this mean for those who provide guidance to investors?

Three Focus Areas:

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1998 2001 2004 2007 20100

50

100

VIX (daily 1998-2012)

1998 2001 2004 2007 20100

2

4

6

8

10 Year Treasury Yield (daily 1998-2012)

1998 2001 2004 2007 2010400

900

1400

1900

S&P 500 (daily 1998-2012)

S&P 500: 121910 Yr T-Bill:

4.79%VIX:

20.84

Daily Averages 1/1/98 – 8/30/08 Daily Averages 9/08 – 8/24/12

S&P 500: 114610 Yr T-Bill: 2.91%VIX: 27

More than a Decade of Market Crashes, Low Rates and Volatility Spikes…

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Investors are Reacting to Headlines…

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How Investors are feeling…

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Source: SimFund, excludes ETFs, VA and Closed End; Data is global in scope and is as of 6/30/2012

2007 2008 2009 2010 2011 2012 ytd

$82

$35

$302

$171

$69

$103

BONDS: +$762 billion

2007 2008 2009 2010 2011 2012 ytd

$121

-$196

$21

$49

-$36

$23

Retail Equity and Bond Flows 2007- Q2 2012(in Billions)

EQUITIES: – $18 BILLION

They continue to vote with their feet…

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Over a decade of difficult market conditions

Economy, fiscal policy & demographic trends providing headwinds

What does this mean for those who provide guidance to investors?

Three Focus Areas:

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Aging population with low retirement readiness

Pension funding levels low – corporate and government

Consumers facing mountain of debt

Investor confidence and trust shaken

Trends we are seeing…

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Percent Of Population Age 65 and Older

Source: U.S. Department of Health and Human Services and U.S. Department of Commerce, “An Aging World － International Population Reports,” June 2009. Estimates for years 2010 and beyond.

1950-2000 CAGR Overall Pop = 1.7% 65+ = 1.4%

2000-2050 CAGR Overall Pop = 0.8% 65+ = 2.6%

1950 1960 1970 1980 1990 2000 2010 2020E 2030E 2040E 2050E

4% 4% 4%5% 5%

6% 6%8%

10%

13%14%

8%9%

11%12%

13%15%

17%

20%

24%26%

27%

Developing WorldDeveloped World

Trend #1: Aging Populations Present Challenges:

The average working American household

(primary decision makers aged 45) has saved only $33,000

for retirement

Americanhouseholds could

experience a potentialincome drop of

28%in retirement

Source: Fidelity Retirement Savings Assessment, April 18, 2012

Americans are Falling Short of Retirement Needs:

For retired Americans, the

median savings is

$55,000 ~40% do not have

sufficient incometo cover monthly

expenses

Source: Fidelity Retirement Savings Assessment, April 18, 2012

This Includes Those In Retirement:

2003 2004 2005 2006 2007 2008 2009 2010 20110%

20%

40%

60%

80%

100%

120%

90%

92% 93%

101%

108%

79%

82%

85%

74%

13 Source: Goldman Sachs, 2011, Credit Suisse, 2012 estimates.

Aggregate DB pension funding status (assets/liabilities) of S&P 500 sponsors

Mandatedlevel tofreeze benefits

Full Funding level U. S. corporate

pension plan deficit is $458B

Trend #2: Corporate DB Under-funded:

14Source: Pew Center on the States 2011 NOTE: Pew was able to obtain fiscal year 2009 data for all states except Hawaii and Ohio. For Hawaii, fiscal year 2008 data were used; for Ohio, 2009 data were projected using preliminary valuations.

OK

RI

MS

MA

TX

AZ

COUT

WY

ID

NV

IA

CA

OR

WA

NM

AK

HI

MT

MN

ND

SD

KS

NE

AR

LA

ALGA

FL

MO

WI

IL

MI

IN

KY

TN

SC

NC

VAWV

PA

NY

NJDE

CT

VT ME

MD

MS

VTNH

OH

DC

OK

    92%-101%    84%-91%    79%-83%    69%-78%    52%-68%

State Pension Under-funding Represents a Collective $660 Billion Gap:

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011100

110

120

130

140

150

160

170

180

190

200

3

4

5

6

7

8

9

10

11

$8.27T totalmortgage debt (rhs)

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U.S. home price index (lhs 2000=100)

S&P/Case-Shiller U.S. National Home Price Index & Total Household Mortgage Debt

2000-2011, Quarterly $T

Source: Haver Analytics, February 2012.

S&

P/

Cas

e-S

hille

r In

dex

Mortgage debt

Trend #3: Consumer Face Mountain of Debt:

16Government debt includes federal, state, and local government debt. Source: Federal Reserve Board, FAM(AART) as of 9/30/11.

GovernmentNon-Financial Corporations

HouseholdsFinancial

Corporations

30-Yr Avg. Debt/GDP Ratio:

57% 63% 69% 65%

Current Debt/GDP Ratio:

87% 76% 87% 91%

Change in Debt Levels, Q3 2008–Q3 2011

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Percentage Point Change

Deleveraging Still a Headwind of U.S. Economy:

53%concerned with how

market conditions are impacting their

investments

52%pessimistic about the

general economic market over the next

six months

56%concerned about the

impact a downturn will have on their investments

46%believe that the rules

for investing have changed in the past 3

years

68%have changed the

long term growth rate they anticipate

receiving on their investments

42%of investors expect

stocks to return 3% or less on average over

the next 5 years.

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Source: These results are based on an online survey conducted among a sample of 621 adults comprising 321 men and 300 women 18 years of age and older who own a retirement or investment account. The data was collected January 19-22, 2012 by ORC International, an independent research firm not affiliated with Fidelity Investments. The results of this survey may not be representative of all investors meeting the same criteria as those surveyed for this study.

Trend #4: Investors are Pessimistic:

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Over a decade of difficult market conditions

Economy, fiscal policy & demographic trends providing headwinds

What does this mean for those who provide guidance to investors?

Three Focus Areas:

Quarterly Webinars

70% lift in Seminar attendance ‘11 vs.‘08

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Viewpoints reaches over 10 million investors annually

Seminars & Webinars

Articles & Interactive Graphics 1:1 Planning Interactions 1 million+

planning interactions annually

48% lift in one-on-one planning sessions ‘08-vs.’11

Screenshots for illustrative purposes only

Source: Fidelity business data as of Dec. 31, 2011. One-on-one retirement planning sessions with Fidelity representatives and workplace participants or individual investors using Retirement Quick Check, Retirement Income Planner or Income Strategy Evaluator

Different Approaches to Engaging and Educating:

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Market Related:

“How can we little investors protect ourselves from the fallout from Europe?”

“How will the slowing economy in Europe and China effect the US's recovery?“

“How should I adjust my portfolio in order to gain additional yield?

Financial Planning Related:

“Help we find ways to help generate/maintain income in retirement?”

“How will tax changes impact my financial plan? What strategies should I be thinking about?”

“How do I balance competing financial priorities?” Debt, Retirement, College?

Focus On The Key Questions:

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57%acted on the information

by more than

doublingtheir Deferral Rate

45%acted on the information

by making Asset Allocation changes

Employees Who Used Guidance Tools…

Source: Fidelity Investments as of Sept 2011

Done well, it can positively influence behavior…

Questions & Answers

Appendix: Important Disclosure InformationS&P 500 Index

S&P 500 Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.

Barclays Capital U.S. Long Government/Credit Bond Index

Barclays Capital U.S. Long Government/Credit Bond Index is a market value-weighted index designed to measure the performance of fixed-rate, dollar-denominated, investment-grade debt securities with maturities of 10 years or more.

CBOE Volatility Index

CBOE (Chicago Board Options Exchange) Volatility Index (VIX) is a weighted average of prices on S&P 500 Index options with a constant maturity of 30 days to expiration. It is designed to measure the market’s expectation of near-term stock market volatility.

S&P/Case-Shiller U.S. National Home Price Index

S&P/Case-Shiller U.S. National Home Price Index is a value-weighted quarterly index that measures changes in U.S. single-family home prices nationally.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Indexes are unmanaged. It is not possible to invest directly in an index.

 

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