Edward “Ned” Johnson III, a Boston business icon, mutual fund pioneer and longtime chairman of Fidelity Investments, plans to retire next month and will be succeeded by his daughter, Abigail Johnson — the third generation to head the company, Fidelity announced yesterday.
“As Chairman and Chief Executive Officer, Abby will have responsibility for the management of all FMR LLC businesses, including Fidelity Financial Services and Fidelity’s other diversified businesses and investments,” Johnson said in a memo to Fidelity employees. “This expansion of responsibilities is a natural progression of Abby’s 28-year career at Fidelity, in which she has taken on increasingly more challenging and complex roles.”
Edward Johnson, 86, has been chairman of Fidelity Investments since 1977. Abigail Johnson has been chief executive officer since 2014 and will stay in that role, according to a company spokesman. Edward Johnson will become chairman emeritus.
“It’s really a natural progression for leadership position of the firm,” said Vincent G. Loporchio, senior vice president of Fidelity Investments. “She has been vice chairman for many years, and she will oversee all of the longer-term strategic goals of the firm in addition to the work she does as the CEO.”
Edward Johnson will have office hours in Boston and will “continue to consult periodically with Abby and Fidelity’s Board of Directors,” according to his memo, which went out yesterday. He will officially step down from the chairman position next month.
“I think you can say that Ned Johnson helped radically transform the way in which investors are viewed and also how they were serviced,” said Jim Lowell, editor-in-chief of two independent newsletters that follow the company. “He really built the discount brokerage model, which really helped break the back of the old-world brokers.”
Abigail Johnson will be the third generation to run the massive company. Ned Johnson’s father, Edward C. Johnson II, started Fidelity in 1946.
“As I step back from my management duties, I think it is appropriate to pause and reflect on where we stand as a company,” Edward Johnson wrote in his memo. “Throughout Fidelity’s long history of growth, our dual commitments to our customers and to innovation have served us well.”
During his time as Fidelity’s top executive, Edward Johnson helped create direct marketing of mutual funds, and broke new ground by offering check-writing on money market funds. Under his leadership, Fidelity also began offering technology-based customer service.
He was also a leader in the Boston business community and created a company that succeeded beyond the Hub.
“He led one of the biggest companies for multiple decades and has had a huge imprint on Boston for businesses,” Lowell said. “He was a visionary, and I think something that is underestimated is — in this era of glamour shots — you never saw him despite the fact that his charitable works were legion and legend.”
Edward Johnson is also involved with the Foundation for Neurologic Diseases, Beth Israel Hospital, the Boston Society of Security Analysts, the American Academy of Arts and Sciences, the Boston Museum of Fine Arts, Massachusetts General Hospital and Children’s Hospital. He is also chairman of the Fidelity Foundation and the Edward C. Johnson Fund.
