From Wal-Mart Stores to Ford, Wall Street is full of family businesses, and a surprising number of parent-offspring management teams can...

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NEW YORK — From Wal-Mart Stores to Ford, Wall Street is full of family businesses, and a surprising number of parent-offspring management teams can be found in the mutual-fund world, as well.

For shareholders, family-run funds where lessons have been lovingly passed down from one generation to the next can offer unusual stability. The advantage of investing with this kind of company is that the managers are not only watching over your assets, but also their own family wealth and legacy, said Russ Kinnel, director of fund research at Morningstar.

“There’s bound to be a strong interest in protecting your principal and your reputation,” Kinnel said. “However, I think it can be a mixed bag. On the one hand, you have some nice stability. … But at the same time, there can be issues. You have to ask, has this person really earned their spot? Obviously some will show experience beyond their years, for having grown up in it, and having fathers that can show them the ropes. That can be tremendously valuable.”

Business is a family affair at the nation’s largest fund complex, FMR, the financial conglomerate known as Fidelity Investments, where Edward Johnson III succeeded his father in 1972. His daughter, Abigail, is the company’s largest single shareholder, and despite a recent lateral move in management, many analysts think she is being groomed to take over the business, which includes some 340 funds.

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Other notable family-run fund companies include Franklin Resources, a San Mateo, Calif., firm founded by another family of Johnsons that manages more than 100 funds, and the Tucson, Ariz.-based Davis Selected Advisors, where Christopher Davis took over management from his father in 1997.

For any parent trying to work with a son or daughter, it’s wise to occasionally take off your mentoring hat, said Don Hodges, 71.

After 46 years in the business, he has a great deal of wisdom to offer, but said his son frequently contributes ideas he might never have considered. Craig, 41, worked as a broker before deciding to go into business with his dad in 1989; now the two co-manage the Hodges Fund (HDPMX).

“When you put your name on a fund, there’s a certain element of pride, of not wanting to be embarrassed or neglectful. … It forces you to want to work just a little harder to be right,” Don Hodges said.