Fidelity Investments is now earning a third of its revenues from insourcing payroll, health benefits and other administrative tasks from third parties. Boston-based Fidelity, the world’s biggest mutual fund company, said it added 1,175 new clients and 2.6 million new employees to its human resources and benefits outsourcing services last year.
“This is very much a core business for us today,” Peter Smail, president of Fidelity Employer Services Co. told a conference call today. “Our value proposition is that you outsource to us and we’ll take care of the technology over time,” Analysts predict the less volatile outsourcing business could account for half of Fidelity’s revenue in five years.