The Investment Industry Has Lost Its Giant: Remembering Ned Johnson

I had the privilege of working for Ned Johnson for nearly four years, and his influence and leadership remain with me today.

Beyond me, Ned had a profound impact on investing, the investment industry, and the democratization of investing. Think about his impact:

• His focus on measuring investment performance led to the professionalization of research and portfolio management throughout the industry.?
• Ned disrupted distribution of retail investment products by bypassing expensive commission channels and creating direct-to-the-consumer channels. Indeed, he pioneered retail distribution twice, first through the widespread application of the "1-800" telephone channel, and then online. Ned saw the profound power of online before most and extended it from just transacting to an effective channel for investment guidance and retail investor care and service.?
• Ned and Fidelity turned retirement investing into a powerful means by which Main Street could come to Wall Street on equal terms. Recognizing early the trend away from defined benefit plans, Ned moved retirement investing out of benefits departments and made IRA and 401k investing an essential part of middle-class financial planning.

Beyond Ned's multi-dimensional innovation, he was also an extraordinary business leader. Ever concerned about the potential for misaligned incentives between management and shareholders in public companies, Ned insisted on broad-based employee ownership of the various Fidelity companies.?As the patriarch of a family-controlled business, he always focused on the long-term and was quite willing to take on a 10+ year horizon for a new line of business.?But, he also insisted that Fidelity senior managers be incented and compensated over a similarly long period—and be accountable for the firm's long-term results. One's long-term holdings of Fidelity ensured focus on long-term risk management and results. He coupled that long-term mindset with a laser-focus on doing what is right for the investor and retirement participant.?

Similarly, he recognized the importance of technology, the speed with which it changes, and the need to constantly think and rethink "How do I effectively apply technology here?"

Ned was also an ever-curious citizen of the world. If he read about something new or new to him, he often would follow that with a visit. Recognizing that American education is understandably influenced by Western scholarship and values, Ned was a keen student of Eastern and Asian cultures. "Kaizan" (a Japanese term meaning continuous improvement) became a core value at Fidelity. I remember when I had not seen Ned for a while, he would ask "what have you learned lately?"

Finally, Ned's philanthropic generosity was legendary. Eschewing names on buildings, Ned was far more likely based on his study of acoustics to debate with the architect how the building should be built with his anonymous gift. His impact on a wide variety of philanthropies—art, education, science, medicine, and the environment to name a few—will carry on for generations.?