Edward C. 'Ned' Johnson III, Longtime Leader At Fidelity Investments, Dies At 91

Edward C. “Ned” Johnson III, who grew the family-owned, Boston-headquartered Fidelity Investments into one of the world’s most prominent financial services companies, died Wednesday at his Florida home at the age of 91.

A Life In Finance: Born in Milton, Massachusetts, in 1930, Johnson received a bachelor's degree from Harvard College in 1954 and served in the U.S. Army for two years after graduating.

After his military service, he briefly held a low-level job at Boston’s State Street Bank before joining his father’s firm Fidelity Investments as a research analyst in 1957.

Johnson became the first manager of Fidelity’s Magellan fund in 1963 and ran it through 1971. According to Bloomberg, Magellan outperformed the Standard & Poor’s 500 by an annual average of 22 percentage points.

Johnson became president of Fidelity in 1972 and took on the roles of CEO and chairman in 1976 following his father’s retirement. Johnson ceded the CEO role to his daughter Abigail Johnson in 2014 and the company’s chairmanship in 2016.

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A Dedication To Innovation: During his leadership years, Johnson expanded Fidelity’s operations and modernized its approach to client services. Among his innovations were the direct sale of mutual funds to individual investors rather than through brokers, the introduction of 401(k) retirement plan management services and the creation of money market funds that enabled customers to write checks.

He also introduced the ability to conduct transactions through a toll-free telephone number, creating walk-in centers for retail investors and offering funds that were focused on individual sectors.

According to the New York Times, today’s company has 500 mutual funds and manages $11.8 trillion. Fidelity Investments recorded $24 billion in revenue last year and an operating income of $8.1 billion.

Johnson avoided taking his company public, and it is half owned by the Johnson family and half by its employees. When he was once asked by a reporter if Fidelity would be publicly traded, Johnson replied, “When I’m dead and buried.”

Photo: Edward C. "Ned" Johnson III, courtesy of Fidelity.