This
past year tested Nationwide Financial and the rest of the industry. The effects
of prolonged weakness in the stock market, coupled with steadily declining
interet rates, created extraordinary pressure on margins and our ability to
grow profits. One immediate effect of the weak market was an abrupt shift
in consumer preferences from equity-based to safer, fixed-rate products. Billions
of dollars in investment assets were at play. Yet, we were able to adapt,
and in some cases, even thrive as we served these new preferences — thanks
to the integrity of our many relationships. Together, we passed the test of
the most unusual and uncertain marketplace in many years.
Although we were not satisfied with the year’s financial results, we
made important progress to fundamentally strengthen the Company’s
product offering, service capabilities and distribution
breadth. These moves improve our competitive position and our ability to weather
even the most challenging market environments.
It was also a year in which we reexamined strategies, market opportunities
and long-term goals. Through this process, we emerged with a stronger conviction
that our success hinges on the relationships we continue to build with our
business partners, customers, associates and investors. These relationships
are the foundation of our success and the formula for our continued growth.
We focus on relationships because the business
of personal savings is significant. The satisfaction
we seek for our customers is long lasting and meaningful: helping them build
and protect wealth, manage it effectively in retirement,
