Fidelity Investment's long-time chairman Edward "Ned" Johnson is announcing his retirement, completing the transfer of the company to his daughter Abigail Johnson.
Mr Johnson's retirement was not unexpected, as he is 86 years old and Abigail Johnson (54) has been running the U.S. mutual fund giant on a day-to-day basis as chief executive since 2014.
Fidelity, known for its roots in stockpicking and as a home to the likes of star managers such as Peter Lynch and William Danoff, is one of the largest mutual-fund firms confronting broad industry transformations.
The move caps Johnson's ascent to the top of a firm founded by her grandfather and led for decades by her father. I will become chairman emeritus, maintain office hours at 245 Summer Street in Boston, and continue to consult periodically with Abby and Fidelity's board of directors, ' the FT reported the memo as saying. She will add the chairman role to her existing role as chief executive.
James Lowell, editor of Fidelityinvestor.com, an independent newsletter for investors, said he expected Ms Johnson to increase Fidelity's outreach to the financial advisers and other intermediaries who steer clients to its funds and retirement accounts. "Effectively, it's been hers to run for a while now", he said. She replaced her father Ned as CEO in 2014. I have never felt more confident about Fidelity's future than I do now. "They are as important to her as new products were to her father". Fidelity's earnings jumped 29% in 2014, despite fund outflows.
After all, this is her time, and Johnson has been getting ready for it since 1988, when she started as an equity analyst.
"Throughout Fidelity's long history of growth, our dual commitments to our customers and to innovation have served us well", Johnson III said in the memo.
Fidelity, like many of its peers in asset management, has taken a hit as investors have abandoned active management and poured money into index-tracking mutual funds and exchange-traded funds.
Mr. Johnson has always been an advocate of so-called active management and in the early days of index funds questioned the appeal of funds that aim to match, rather than beat the market. He made Fidelity the first company to offer check-writing on money market funds. But analysts say it's too late to catch up with Vanguard, the nation's largest mutual fund company. Under his leadership, Fidelity also began offering technology-based customer service.