By all accounts, Morgan Stanley CEO Ted Pick is a really smart guy. Multiple people have posted that sentiment on industry trade stories, and when I asked a veteran Wall Street reporter last week about Pick, without missing a beat he replied, “he’s a really smart guy.” One would hope so, given that Pick last year hauled in $45 million in compensation, his reward for Morgan Stanley achieving record earnings per share.
Here’s why I perceive Fidelity Investments CEO Abigail Johnson as smart, if not smarter, than Pick and why I hope Fidelity is poised to clean Morgan Stanley’s clock.
Despite Morgan Stanley’s banner profits, the firm last month moved to fire 2,500 workers, representing roughly three percent of its global workforce. Morgan Stanley’s PR people positioned the layoffs as the result of “shifting business and location priorities” and “individual job performance” issues here and abroad, but New York Post columnist Charlie Gasparino wasn’t buying the spin.
“I can’t imagine CEO Ted Pick and his team had loaded up with 2,500 bankers and traders who were dead weight,” Gasparino wrote. “In fact, my sources at the firm say the cuts across the firm’s investment banking and trading, wealth management and investment management divisions are mostly about replacing back-office workers in these areas with artificial intelligence bots.
“Pick and his bean counters might not admit it, but they are said to believe that for an increasing number of jobs, chatbots are more efficient.”
Morgan Stanley’s leadership increasingly appears to view AI not merely as a productivity tool, but as a mechanism for reducing dependence on human labor. Fidelity’s Johnson appears to be taking a very different approach to AI than Pick and many other CEOs.
News leaked last week that Fidelity is preparing to cut 1,000 jobs globally, representing about one percent of its workforce. But unlike Morgan Stanley, Fidelity appears to view AI less as a labor replacement tool than as a way to expand engineering capacity, customer scale, and institutional capability.
In fact, Fidelity says it plans to hire even more workers than it’s terminating, pretty impressive given that the company has doubled its headcount to roughly 80,000 employees since 2020, while the biggest U.S. banks last year implemented the largest workforce reductions in almost a decade.
“As part of this transition, we made the difficult decision to eliminate the roles of roughly 1% of our workforce,” an unidentified Fidelity spokesperson said in a statement to the Boston Herald, which broke the story about the layoffs. “At the same time, however, we are planning to hire nearly twice as many software engineers, in addition to the thousands of open roles we are actively recruiting for today.”
Hands-on engineers are a particular target, with Fidelity reportedly looking to hire nearly 2,000 early-career engineers.
“These changes are about getting the right combination of skills in place for where Fidelity and its customers need them most,” the Fidelity spokesperson said. “This means creating more room for early-career, hands-on engineering roles and streamlining management layers.”
As a decades-long Fidelity client and loyalist, I’m heartened, but not surprised, that Johnson doesn’t appear to view chatbots as the holy grail of Fidelity’s future.
Fidelity, by necessity, has become a cutting-edge technology company. The Boston firm reported in its 2025 annual report that it had roughly $7.1 trillion in assets under management, $18 trillion in assets under administration, and 57 million active accounts.
Fidelity’s website is robust, intuitive, and remarkably stable. Yours truly, among the most technologically challenged, can navigate it easily, though my Fidelity advisor can slice, dice, and analyze my investments with a wizardry I’ve yet to master.
It’s called artificial intelligence today, but Fidelity has spent decades using technology to deepen customer relationships and improve the client experience.
Fidelity also happens to be a world-class HR management company. In all my dealings with Fidelity over the years, I can’t recall ever interacting with an employee who wasn’t knowledgeable and exceptionally well trained. I’m still blown away by the time I called Fidelity at 2 a.m. Christmas morning on the East Coast and someone was available to explain in considerable detail the fine points of a Roth IRA.
That Johnson wants to hire more engineers makes perfect sense to me. AI may automate portions of white-collar work, but it also increases institutional dependence on engineering depth, cybersecurity resilience, and technological infrastructure. When systems fail, markets panic, or cyberattacks hit, companies still need humans who understand exactly how the machinery works.
Admittedly, Johnson has a major strategic advantage over Pick. Fidelity is a private company controlled by Johnson’s family, allowing her to remain laser-focused on positioning the business for the long term. By contrast, Morgan Stanley is a public company, meaning Pick must continually satisfy shareholders, defend the stock price, and produce quarterly results robust enough to justify both his job and his enormous pay package.
That difference in ownership structure matters. While Fidelity has spent years aggressively expanding its workforce, engineering capacity, and customer infrastructure, Morgan Stanley last year authorized $20 billion in stock buybacks, which reduce the number of shares outstanding and mechanically increase earnings per share.
Wall Street often rewards buybacks because they can support stock prices in the short term. I’d argue Morgan Stanley might create far more long-term value by investing a larger share of that capital into its employees, technology infrastructure, customer experience, and pricing competitiveness.
Bradley Safalow, a respected market researcher, has shown that companies with the largest buyback programs in the S&P 500 have consistently underperformed the broader market over the past decade.
“Stock buybacks are a sugar rush,” Safalow told Barron’s. “They’re good for a fleeting pop in the share price, but much like most candies, they tend to do more damage over the long term.”
If I were a Morgan Stanley advisor, particularly a high-performing one, I’d be thinking carefully about my future there. Wealth management remains fundamentally a relationship business, and smart advisors know technology should support client relationships, not insert itself between advisors and clients.
Morgan Stanley’s leadership appears increasingly focused on scale, efficiency, and AI-enhanced operating leverage. But the industry’s recent recruiting wars suggest elite advisors still place enormous value on autonomy, economics, and human relationships.
Wells Fargo Advisors last week recruited three billion-dollar teams from Morgan Stanley, including three brothers who spent 27 years, 26 years, and 13 years respectively at the firm. A week earlier, Wells recruited The Taylor Group, a 17-person Manhattan team overseeing nearly $6 billion in client assets.
It’s not difficult to understand the appeal.
Morgan Stanley’s traditional wirehouse structure often pays advisors roughly 40% to 50% of what they generate. Wells offers an alternative through FiNet, its independent channel, where teams willing to assume their own overhead can reportedly keep closer to 90%.
Wells is effectively buying assets by offering a different split of the same pie. If top-producing teams can earn materially more while retaining greater control of their business, what exactly is Morgan Stanley offering them to stay?
Morgan Stanley would likely point to its platform and proprietary products. Investors whose capital remains gated inside the firm’s private credit fund while continuing to pay management fees might have a different perspective.
As of March, Morgan Stanley executives publicly dismissed concerns about advisor attrition.
“We’re not seeing any attrition out of (financial advisors) we like at all,” said Morgan Stanley co-president Dan Simkowitz, who in 2025 received $28.39 million in compensation. “They’re not going away.”
We’ll see.
My guess is Abigail Johnson need not worry much about losing Fidelity advisors to Wells or other Wall Street firms. As much as I value and respect my Fidelity advisor, who possesses an Ivy League law degree and has helped grow my net worth far beyond my expectations, my loyalty ultimately resides with Fidelity.
Reading that Johnson is looking to hire more humans at Fidelity reinforced my faith in her leadership and deepened my commitment to the firm.