In August, after 17 years with the firm, 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 Edward “Ned” Johnson III, chairman and chief executive of Fidelity, assigned her to the post.
Some had thought McColgan would be successor to CEO Johnson. But that prospect was dashed 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 about Lawson's appointment, 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) between her and Ned. She thought she was running the show,” Kobren says.
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 the 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; I think he'll look at it all, and he might actually be a benefit because he's a pretty aggressive guy.” According to the Fidelity release, Lawson will immediately assume McColgan's position until a replacement is found.
It might sound like an all-too-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 at the firm, which went to Walt Bettinger instead.