Abigail Johnson, CEO of Fidelity, is taking full reins of the fourth largest asset manager in the world and assuming its chairmanship from her father, Edward C. Johnson III, who is retiring after nearly six decades with the company. Johnson will now have full day-to-day oversight of Fidelity, which holds some $2.1 trillion in managed assets, and handles the retirement and savings plans of approximately 25 million Americans and 20,000 companies.
In a memo to Fidelity employees obtained by FORBES, outgoing chairman Johnson, 86, said he would step aside from the company after “nearly 60 wonderful years” and become a non-executive chairman, consulting with his daughter and Fidelity’s board of directors on occasion, and maintaining office hours at the firm’s Boston headquarters.
“Abby will have responsibility for the management of all FMR LLC businesses, including Fidelity Financial Services and Fidelity’s other diversified businesses and investments. 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,” said Johnson, who goes by ‘Ned,’ in his employee letter. “Please join me in wishing Abby much success in her new role,” he added. Earlier, the Wall Street Journal reported on the letter.
Read More: Abigail Johnson Ranked #12 In Forbes’ 2016 Money Masters
By taking Fidelity’s chairmanship, Abigail Johnson, 54, continues her ascendance on Wall Street. In October 2014, she became CEO of Fidelity, taking the role from her father. As chairman and CEO, Johnson inherits one of the most powerful perches in all of finance. In FORBES’ 2016 Money Masters issue, Johnson was ranked as the most powerful woman on Wall Street, placing as the 12th most powerful person in finance between Ray Dalio of hedge fund Bridgewater Associates and Jorge Paulo Lemann of 3G Capital.
Johnson has taken the reins of Fidelity at a time of change for active money management firms. Index fund firms like Vanguard and exchange traded fund providers like Blackrock and State Street Global Advisors are encroaching on the territory of active managers like Fidelity by offering passive, low-cost strategies that often outperform their active peers.
Fidelity, which operated 462 different mutual funds as of mid-year, however, has stuck to its roots in active management. Its mutual fund assets are 44% in equities, 25% in money markets, 20% in hybrid fund models, and 11% in fixed income.
On his way to a more hands off role, Edward Johnson III acknowledged these changes. “While we have enjoyed much success, evolving customer preferences and new regulatory requirements are transforming the investment management industry. However, we are prepared to seize the opportunities in this changing competitive landscape. I have never felt more confident about Fidelity’s future than I do now,” he said in his Monday letter to employees.
Abigail Johnson, who rarely gives interviews, was worth $13.2 billion and ranked #29 on the 2016 Forbes 400. Edward Johnson III is valued at $7.4 billion and placed #68 on the Forbes 400. The Johnson family placed #8 on Forbes’ list of America’s richest families, with a combined net worth of $28.5 billion.