Fidelity Investments reported that its 2006 net income was off by 11.3% – its first profit drop in four years – as it scrambled to keep up with rivals, according to news reports. The privately held investment company said its 2006 net income retreated to $1.18 billion from $1.33 billion in 2005. That drop was despite a 16% revenue spike – a record $12.87 billion from the 2005 showing of $11.12 billion, according to Reuters.
The Boston-based firm said it burned through some of its earnings last year to hire new staff, upgrade its technology, and reimburse its funds with more than $42 million after an internal probe of improper gifts to its traders.