The Founding Of Fidelity Investments: A Historical Overview

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is an American multinational financial services corporation based in Boston, Massachusetts. The company was founded in 1946 by Edward Johnson II, and it is still managed by the family today, who own 49% of the company.

The company was founded in 1946 by Edward Johnson II

The history of Fidelity Investments, one of the largest mutual fund companies in the US, can be traced back to 1930 when it was known as the "Fidelity Fund". However, it was in 1946 that Edward C. Johnson II, a Boston lawyer, established Fidelity Management and Research Company, the predecessor of Fidelity Investments. Johnson had bought the "Fidelity Fund" in 1943, and in 1946, he formed the corporate entity that would become Fidelity Investments to serve as an investment advisor to the fund. Johnson's strategy focused on making money by investing in stocks with growth potential rather than simply preserving capital. He also established the Puritan Fund, the first income-oriented fund to invest in common stock.

Johnson's innovative approach to investment management led to several firsts in the industry. Fidelity was the first to offer mutual funds with check-writing services, hourly updates on the net value of a mutual fund, and same-day trading of fund shares. This spirit of innovation has continued throughout the company's history, helping it become one of the largest asset managers in the world. As of September 2024, Fidelity Investments had $5.8 trillion in assets under management and $15.0 trillion in assets under administration.

The company has expanded beyond its initial focus on mutual funds and now offers a wide range of financial products and services to over 40 million individuals. It operates a brokerage firm, manages mutual funds, and provides fund distribution, investment advice, retirement services, index funds, wealth management, securities execution and clearance, asset custody, and life insurance.

Fidelity's international presence also began in 1946 with the establishment of Fidelity International in Bermuda to attract foreign investments. In 1969, this entity became known as Fidelity International Limited (FIL) and has since grown to serve clients in Europe, Canada, EMEA, and Asia. FIL handles investments independently from its US counterpart, with its own investment management services, including mutual funds, pension management, and fund platforms.

The founding Johnson family still owns 49% of Fidelity Investments, with employees owning the remaining 51%. Abigail Johnson, who became CEO in 2014, is the current leader of the company, succeeding her father, Edward Johnson III, who was CEO since 1977.

It is one of the largest mutual fund companies in the US

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is an American multinational financial services corporation based in Boston, Massachusetts. Established in 1946, the company is one of the largest mutual fund companies in the US.

Fidelity offers its customers one of the widest ranges of mutual funds in the industry, as well as discount brokerage and institutional and trust services. The company is known for its innovation, leading the industry in offering mutual funds with check-writing services, hourly updates on the net value of a mutual fund, and same-day trading of fund shares. With more than three million individual and corporate customers, it is one of the largest managers of mutual funds in the country, second only to Merrill Lynch.

Fidelity has a long history of success in the mutual fund industry. The "Fidelity Fund", created in 1930, was the only fund approved by John C. Hull, the Securities Director for Massachusetts, during the Great Depression due to widespread bank failures. In 1943, Edward C. Johnson II, a Boston lawyer, bought the fund and became its president and director. Johnson formed FMR in 1946 to serve as an investment advisor to the Fidelity Fund, and he also established the Puritan Fund, the first income-oriented fund to invest in common stock. Johnson's strategy focused on buying stocks with growth potential rather than preserving capital, and he believed in individual fund management rather than management by committee. This approach proved successful, and by 1962 the company had established the Magellan Fund, which eventually became the largest mutual fund in the world.

Fidelity has continued to expand its offerings and presence, both domestically and internationally. In 1969, the company formed Fidelity International Limited (FIL) to serve non-U.S. markets, and it has since opened offices in numerous countries, including Japan, the United Kingdom, India, and China. In the U.S., Fidelity established the Fidelity Group Individual Retirement Account (IRA) and the Fidelity Municipal Bond Fund, the first no-load, open-ended fund in the country to invest in tax-free municipal bonds. The company has also been at the forefront of discount brokerage services, becoming the nation's first major financial institution to offer these services in 1978.

Fidelity's assets and customer base have grown significantly over the years. As of September 2024, the company had $5.8 trillion in assets under management and $15.0 trillion in assets under administration. With its broad range of financial products and services, Fidelity serves over 40 million individuals. The company's success has been driven by its commitment to innovation, customer-centric approach, and focus on long-term growth.

It has over 40 million customers

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), was founded in 1946 by Edward Johnson II. It is an American multinational financial services corporation based in Boston, Massachusetts.

As of 2023, the firm offers financial products and services to more than 40 million individuals. This large customer base is a testament to the company's success and reputation as one of the largest asset managers in the world. With $5.8 trillion in assets under management and $15 trillion in assets under administration as of September 2024, Fidelity is a powerhouse in the financial industry.

The company operates a brokerage firm, manages mutual funds, provides investment advice, retirement services, wealth management, and more. Its large customer base can take advantage of a wide range of financial products and services, contributing to the company's significant influence in the industry.

Fidelity's customer base is spread across over 140 investor centers throughout the United States. The company also has a significant international presence, with offices in Canada, Hong Kong, Japan, India, Europe, and Australia. This global reach has allowed Fidelity to cater to a diverse range of customers and expand its business.

In addition to its financial services, Fidelity has experimented with marketing techniques directed at the baby boomer demographic, such as releasing a compilation of songs by Paul McCartney. The company's focus on diverse customer segments and its commitment to innovation have likely contributed to its impressive customer base of over 40 million individuals.

Fidelity's strong reputation, diverse product offerings, and global reach have made it a trusted financial services provider for millions of customers worldwide. The company's continued success and growth are a testament to its ability to meet the needs of its diverse customer base.

It is headquartered in Boston, Massachusetts

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is headquartered in Boston, Massachusetts. The company was established in Boston in 1946 and is one of the largest asset managers in the world. It is an American multinational financial services corporation, offering financial products and services to more than 40 million individuals.

The company's headquarters are located in Boston, with other major U.S. operations located in Merrimack, New Hampshire; Smithfield, Rhode Island; Westlake, Texas; Dallas, Texas; and several other cities across the country. The company's presence extends beyond the U.S., with offices in Canada, Hong Kong, Japan, India, Europe, and Australia.

Fidelity Investments has a strong presence in Boston, with its headquarters and several investor centers located in the city. The company's Boston address is 82 Devonshire Street, Boston, Massachusetts 02109, USA.

The company's history in Boston dates back to its founding in 1946, when Edward C. Johnson II, a Boston lawyer, formed Fidelity Management and Research Company to serve as an investment advisor to the Fidelity Fund. Johnson's innovative and growth-oriented strategies laid the foundation for the company's success, making it one of the largest mutual fund companies in the U.S.

In 2012, Fidelity Investments moved its Boston headquarters to 245 Summer Street, further solidifying its presence in the city. The company's decision to locate its headquarters in Boston can be attributed to the city's strong financial and business sector, as well as its talented workforce and proximity to other major economic hubs on the East Coast.

Boston has a thriving financial industry, and Fidelity Investments has played a significant role in its development. The company's presence has contributed to the city's reputation as a leading hub for financial services, attracting other businesses and talent in the sector. Additionally, Fidelity Investments has been an active member of the Boston community, with investments in real estate and local businesses, further solidifying its connection to the city.

It is still managed by the Johnson family

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), was founded in 1946 by Edward Johnson II. The company is one of the largest asset managers in the world, with $5.8 trillion in assets under management and $15.0 trillion in assets under administration as of September 2024.

The Johnson family has a long history with the company, dating back to its early days. Edward Johnson II bought the "Fidelity Fund" in 1943 and became its president and director. He then formed Fidelity Management and Research Company in 1946, which later became Fidelity Investments. The Johnson family still owns 49% of the company, with the remaining 51% owned by Fidelity employees.

The family's involvement in the company has continued across generations. Edward Johnson III, son of the founder, succeeded his father as president of Fidelity Investments in 1972. He later became chairman and CEO of the company in 1977, serving in that role for many years.

In 2014, Abigail Johnson, daughter of Edward Johnson III, became president and CEO of Fidelity Investments. She also became chairman of the company in 2016, replacing her father. Abigail was once the largest single shareholder with about a 25% ownership stake, but she sold a significant portion of her shares to family trusts in 2005. Despite this, the Johnson family still maintains a substantial minority ownership position in the company.

The Johnson family's continued involvement in Fidelity Investments is a testament to their long-standing commitment to the company's success and their influence in the financial industry. Their ownership and management of the company have helped shape its direction and contributed to its growth over the years.

Fidelity Investments has evolved and expanded its offerings over time, always adapting to the changing landscape of the investment industry. The company has a strong presence in the United States and has expanded internationally, serving clients worldwide. Their range of services includes mutual funds, brokerage, retirement services, wealth management, and more.

Frequently asked questions