Fidelity Investments Reports Unprecedented IRA Season; Roth-o-meters Research Shows Roth IRA Driving Sales Volume

Business Wire, April 16, 1998

BOSTON--(BUSINESS WIRE)--April 16, 1998--

Popularity of the new Roth Individual Retirement Account (IRA) propelled IRA contributions at Fidelity Investments(r) for the first quarter of 1998 resulting in total IRA net sales that exceeded total IRA net sales for all of 1997, the company reported today. Fidelity did not disclose specific sales figures.

Not since the repeal of universal deductibility in 1986 has Fidelity seen this level of customer excitement about IRAs according to Judith McMichael, vice president, Fidelity Investments. New IRAs were up 155 percent for the "IRA Season," (January 1 - April 15) over the same period the previous year; more than half of these new IRA's were Roth IRAs.

"The results have been stellar," said McMichael. "Not only have we seen tremendous interest in the enhanced IRAs for 1998, we also have seen a large increase in customers contributing to IRAs for the 1997 tax year. And, a significant percentage of people opening Roth IRAs this year either never contributed to an IRA before or had not contributed in over three years. Americans are clearly getting the message that IRAs are better than ever and taking advantage of the opportunity to build a better future."

According to McMichael, renewed interest in IRAs began at Fidelity prior to January 1 with inquiries for IRA information starting as early as last August when the Taxpayer Relief Act of 1997 was signed into law and then increasing more significantly in the late fall. "IRA Evaluator(sm)," an interactive evaluation tool designed to help individuals determine which IRA is best for them, received approximately 9,000 page views per week on Fidelity's Web site during the month of December accelerating to a peak of 32,000 per week in January. Phone inquiries and walk-ins to Fidelity's national network of 79 Investor Centers have more than doubled. For the month of March alone, Fidelity Investor Centers were averaging 11,000 face-to-face interactions per day.

Ongoing evaluation of 1998 IRA customers through Fidelity's Roth-o-meter(sm) research reveals that IRA benefits have encouraged new savers to jump on the retirement savings bandwagon. Of the Roth IRA customers surveyed, more than 40 percent were either "dormant" or "new" (had either not funded an IRA for three or more years or had never contributed to an IRA). Of the "new" Roth IRA investors, a significant portion were women (44%) and Generation Xers (42%). In addition, almost 40 percent of all Roth IRA investors said they would not have contributed to an IRA if the Roth IRA had not been available.

For those who converted existing IRA assets to a Roth Conversion IRA, the ability to withdraw funds tax-free at retirement continues to be the most important factor for the majority (75%). Other important factors cited were the ability to pass assets tax-free to beneficiaries and the absence of the mandatory distribution requirement at age 70 1/2 .

The survey was a three-wave field study conducted by telephone by Neuwirth Research Inc., which interviewed more than 2,000 Fidelity IRA customers over consecutive months beginning in January. Executive summaries of these Roth-o-Meter(sm) surveys are available.

Fidelity Investments is the nation's largest mutual fund company and one of the leading providers of financial services. Fidelity offers investment management, retirement, brokerage and shareholder services directly to individuals and institutions, and through financial intermediaries. The firm also is the No. 1 provider of 401(k) retirement savings plans, the second largest discount brokerage firm and the third largest provider of 403(b) retirement plans for not-for-profit institutions in the United States. At February 28, 1998, Fidelity had total managed assets of $649.9 billion.

Fidelity Brokerage Services, Inc. Member NYSE, SIPC

CONTACT: Corporate Communications

(617)563-5800