What Keeps Finance Up At Night?

Big investment companies see tech as a threat—and an opportunity.

- Sabrina Willmer & Nishant Kumar, With Ivan Levingston

“Alexa … will I meet my retirement goal?”

“You are not on track to meet your retirement goal,” replies Amazon.com Inc.’s voice-activated digital assistant, with not a bit of sugarcoating. Then she suggests turning over $76 a month to Fidelity Investments and its advisers.

This won’t actually happen if you try it on your Amazon Alexa device at home. It’s a demonstration put on by EMoney Advisor LLC, a company owned by Fidelity, in its offices in Radnor, Pa. Amazon provides software for third-party app developers to experiment with new functions. Fidelity is trying to find ways to apply artificial intelligence, computer algithms, and voice- recognition software to the hidebound world of money management and investing.

There’s some urgency to the task. These days, investing firms figure they’ll either master the digital world or become yet another of Silicon Valley’s victims. Each year, Fidelity gathers scores of technologists and executives to confront threats to the 71-year-old business, which manages $2.4 trillion and is one of the world’s biggest mutual fund companies and retirement plan administrators. Like generals and soldiers in a war game, they sketch out what they would do in all kinds of scenarios, such as a market crash or a merger that creates a super-rival. Just as ominous, perhaps, they ask: What if Amazon distributed financial products or offered its own financial advice? What if Google bought its own money manager?