Viewpoints

McColgan Abruptly Leaves Fidelity

After 17 years with Fidelity, Ellyn McColgan stepped down as president of Fidelity Investments distribution and operations, which includes Fidelity Registered Investment Advisor Group (FRIAG), the RIA custodian arm of the mutual fund giant. The news came as a surprise to some considering just five months ago she was assigned to the post by Edward, “Ned” Johnson III, chairman and chief executive of Fidelity.

After 17 years with Fidelity, Ellyn McColgan stepped down as president of Fidelity Investments distribution and operations, which includes Fidelity Registered Investment Advisor Group (FRIAG), the RIA custodian arm of the mutual fund giant. The news came as a surprise to some considering just five months ago she was assigned to the post by Edward, “Ned” Johnson III, chairman and chief executive of Fidelity.

Some had thought McColgan would be successor to CEO Johnson. But that possibility fell apart when Johnson named Rodger Lawson president of Fidelity in July just months after McColgan took her new position. (Lawson was a former vice president at Prudential.) Eric Kobren, executive editor of newsletter Fidelity Insight, says as soon as he heard that, he wondered how long McColgan was going to stick around. “It is pretty simple: they offered McColgan a top job reporting to Ned Johnson and then they brought in someone (Lawson) in between her and Ned. She thought she was running the show,” Kobren says. “If all of sudden they bring someone in between you and your boss, your going to say wait a second, I’m moving down in the organization.”

McColgan previously held other senior management positions at the firm and was a major force in helping Fidelity RIAs get access to the firm’s high-net-worth clients through referrals. Will Fidelity RIAs suffer as a result of her departure? Kobren says while McColgan was helpful to the RIA market, he thinks that success will continue. “I don’t suspect that there will be a change in strategy. Having said that, I think that Rodger’s forte is distribution and marketing, and so I think he’ll look at it all, and he might actually be a benefit cause he’s a pretty aggressive guy.” According to the Fidelity release, Lawson will immediately assume McColgan’s position until a replacement is found.

According to Kobren, Lawson is a dynamo with a strong personality, great vision, and a significant background in marketing at Prudential. “It’s unfortunate because Ellyn is a great operator,” Kobren says, “She’s great at reducing expenses and getting things efficient, bringing service levels up, and she was very dynamic in that I think they could have complemented each other nicely.”

It might seem like an all-to-familiar story. In May, Deborah McWhinney stepped down as head of Schwab Institutional, the RIA custodian business of Charles Schwab and Fidelity’s number one rival in that business. The popular McWhinney was rumored to have left after her potential succession to Chuck Schwab as president of the firm was thrown into doubt: She was passed over for the No. 2 job under Chuck Schwab, which went to Walt Bettinger instead.
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