Edward “Ned” Johnson, former CEO of Fidelity, dies

Edward “Ned” Johnson III, who turned Fidelity Investments into a financial giant and opened up Wall Street to millions of Americans, died Wednesday. Mr Johnson was 91 years old.

“He died peacefully at home in Florida surrounded by his family,” wrote Abigail Johnson, who succeeded her father as Fidelity’s chief executive in 2014 and as chairman in 2016, in a LinkedIn post on Thursday.

Mr. Johnson died of natural causes in Wellington, Fla., where he has lived full-time for the last several years, a Fidelity spokeswoman said.

Mr. Johnson inherited the well-known Boston company from his father in the 1970s, when investors were struggling through a bear market that would dampen enthusiasm for the market and the mutual funds sold by Fidelity. While many of Fidelity’s competitors failed, Mr. Johnson pushed the company to reinvent itself through a series of new ventures.

Fidelity was the first company to offer a money market fund, allowing investors to write checks on their holdings. The company created a toll-free number and advertised. (Mr. Johnson even helped write the ad copy.) Fidelity opened its own discount brokerage, expanded its reach among retail investors, and expanded overseas. Under Mr. Johnson’s leadership, Fidelity also built the nation’s largest 401(k) company and helped millions save for retirement.

His enthusiasm for stocks — and his talent for marketing celebrity executives like Peter Lynch — helped rekindle many Americans’ love of the market.

“Fidelity would have been stagnant if Ned hadn’t stepped in and started a brand new company,” said Joshua Berman, a longtime legal counsel to Mr. Johnson.

Many of the initiatives also represent perhaps Mr Johnson’s most enduring legacy, according to the executives who have worked with him: “He wanted to take investment vehicles available to his social class and spread them to the middle class,” said Robert Pozen, a former Fidelity President.

Fidelity ended 2021 with $11.78 trillion in assets under management, or what is in Fidelity accounts, and Fidelity funds held by its competitors’ clients. The firm’s assets under management, or the amount under management by Fidelity’s funds, was $4.48 trillion, up from $3.8 trillion a year ago.

Fidelity grew into a financial giant but, like Mr Johnson himself, remained extremely private. The Johnsons control 49% of FMR Corp., Fidelity’s parent company.

Boston’s richest man lived for almost half a century in the same Beacon Hill townhouse, a short walk from Fidelity’s old offices on Devonshire Street. He donated to dozens of institutions that supported the arts and medical research, but there are no art museums, hospitals, or libraries that bear his name.

Sharing his father’s fascination with Asian culture, Mr Johnson would spend a month or more each year touring Japan or China.

The younger Mr. Johnson was an eminent art collector with a particular interest in New England furniture. For years he carried a flashlight to examine the joinery of Chippendale pieces he came across.

Mr Johnson and his daughter Abigail Johnson in 2004.


Brooks Kraft/Corbis/Getty Images

He founded the Brookfield Arts Foundation, owned several hundred grandfather clocks, and once had an entire two-story house in China dismantled and flown in more than 2,000 pieces to a museum in Salem, Massachusetts.

“He was a very, very unusual man,” said Mr. Berman, the legal counsel. “He was passionately curious about just about everything.”

Mr. Johnson is survived by his wife, Elizabeth, three children, Abigail, Elizabeth and Edward, and seven grandchildren.

“He loved his family, his colleagues, his work, the stock market, art and antiques, tennis, skiing, sailing, history and a good debate,” wrote Abigail Johnson. “You could count on him to have opposite opinions on almost everything.”

Edward Crosby Johnson III was born in 1930. He grew up in the Brahmin enclave of Milton, Mass., in the home where his grandmother raised her family.

The Johnsons, who can trace their Boston roots back to the 17th century, had wealth and status long before Mr. Johnson’s father, a lawyer by training, founded Fidelity in 1946. But Edward Johnson II loved the stock market and all its imperfections he instilled in his son the same lifelong fascination.

“We’re learning a lot about brokerage, but don’t tell Ned that,” Edward Johnson once said to his assistant after a walk with his young son, according to an article in Boston Magazine.

Staff and colleagues said the younger Mr Johnson struggled with dyslexia and had attended several preparatory schools before attending Harvard College.

“Reading was very difficult for him,” said James Curvey, a former president of Fidelity. “But he was very visual.”


Ned Johnson, left, with General Electric CEO Jeffrey Immelt in 2002.



At meetings with his lieutenants, Mr. Johnson disassembled and reassembled the staplers. Years later, when he was struggling to explain what Fidelity’s first website would look like, he cleared his calendar and spent six weeks working with the company’s software engineers, Mr. Curvey said.

Mr. Johnson spent two years in the Army before returning to Boston for a short stint at State Street corp

Mr. Johnson joined his father’s firm as an analyst in 1957, working with Gerald Tsai, Fidelity’s top manager at the time.

In the 1960s, Mr. Johnson’s investments began to outperform other growth stock funds — including Mr. Tsai’s. When Fidelity launched its future flagship fund, Fidelity Magellan, in 1963, Mr Johnson was its first manager.

By the time Mr. Johnson became president of the firm in 1972, Fidelity had $3.9 billion in assets under management — most of it in stock funds that bled money until the market started to rise a decade later.

Fidelity made its first direct contact with Main Street in 1974 with its new offering of money market mutual funds. The company started its brokerage business in 1978 and began selling retirement accounts to US corporations in 1982. In 1995, Fidelity became the first major investment firm with a website.

The moves would also anticipate sweeping changes in the way Americans invest. Fidelity had tapped into the class of self-motivated investors who didn’t need brokers to tell them where to put their money.

Mr Johnson invested heavily in technology, installing generators under the sidewalks of Fidelity’s office tower to ensure the firm didn’t run out of power. He rarely shied away from sharing his opinions with tech luminaries like Microsoft corp

Co-founder Bill Gates, according to former Fidelity President Bob Reynolds.

Mr. Johnson also took on politicians, usually behind the scenes, over taxes. As Fidelity expanded, he attempted to relocate businesses and employees to offices outside of his home state. His family office moved to New Hampshire’s more lenient tax laws.

For Mr. Johnson, ideas flowed at a staccato rhythm; some worked, others failed. Fidelity was a family business – there were no public stockholders or quarterly reports to limit its horizons or imagination, and there were fewer critics to denounce the company’s missteps.

“I don’t think there was ever a strategic plan,” said Peter Lynch, former star manager of Fidelity.

Mr. Johnson frequently visited Mr. Lynch’s office, invariably racking his brains at the end of the day. “I had a code,” said Mr. Lynch. “I called my wife and said, ‘What’s for dinner?’ “It meant that Mr Lynch would miss the 6:15 p.m. train, and possibly more.

The conversation lasted for decades. “We are now talking about Tesla or Apple,

‘ Mr. Lynch said in 2018. ‘It’s the same question he would have asked 50 years ago.’

Mr. Johnson’s father died in 1984. “I had never seen a father and son so close together,” said Mr. Reynolds. “He used to go to his father’s office and spend four hours there. And they only talked about the market.”

Mr Johnson’s daughter Abigail joined Fidelity in 1988.

She climbed steadily, eager to put her own stamp on Fidelity. In 2004, Ms Johnson tried to get her father out of office over disagreements over some business decisions. The plan fell through after he found out about it and issued enough shares to dilute his children’s ownership of the family business, people familiar with the matter said.

After the dust puff, however, he formed a three-person committee to look into the company’s succession plan, people said. Another decade would pass before Mr. Johnson was ready to hand the job over to his daughter.

The market rally following the financial crisis left many investors disillusioned with the returns from active funds and the higher fees they charged. Caught on the wrong foot, Fidelity fell behind as the industry switched to low-cost index funds. Mr. Johnson had been reluctant to embrace the changes that were about to take place. He ended up doing it by launching index funds and offering passive funds to broker clients, but “I don’t think he ever believed in it,” said Mr. Reynolds.

In retirement, Mr. Johnson stayed out of the limelight.

“I am proud of what we have built and equally proud of what Fidelity has become,” Mr Johnson said in a January 2022 statement to the Wall Street Journal. “From day one, our focus was on our customers, and that’s still the case today.”

At a 2012 dinner honoring the Johnsons, Mr. Johnson watched as his daughter recounted the family dinners, which were interrupted by Fidelity customers. Her father, she said, would always take those calls.

Ned Johnson was “a man consumed by passion and endless energy to fix things,” she said.

write to Justin Baer at justin.baer@wsj.com

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