At age 77, Edward "Ned" Johnson III can't keep this pace up forever. But it sometimes seems the Fidelity Investments chief hopes to. Johnson's tenure running the...

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BOSTON — At age 77, Edward “Ned” Johnson III can’t keep this pace up forever. But it sometimes seems the Fidelity Investments chief hopes to.

Johnson’s tenure running the nation’s largest mutual-fund company has spanned three decades — the only other change of leadership in 61 years at Fidelity was when Johnson took over for his father.

But the job has become increasingly complex as Johnson tries to fend off rivals’ gains and streamline operations, while outsiders’ calls for governance reform grow louder.

“He hasn’t missed a beat, and a lot of people have crumbled while he’s still going 100 miles per hour,” says Eric Kobren, a former Fidelity employee who edits the independent money-advice newsletter Fidelity Insight. He suspects Johnson “isn’t going anywhere soon.”

The notoriously insular company isn’t publicly offering a timeline for leadership change or disclosing details of a succession plan it says it has in place, even amid some suggestions the uncertainty could be hurting Fidelity’s competitiveness.

The heir apparent — Johnson’s 46-year-old daughter, Abigail Johnson — has not been confirmed as such, and some observers question whether she even wants the job. And a flurry of management and organizational changes this year eliminated two other successor candidates from contention.

Outsiders still regard Abigail Johnson as an odds-on favorite for the top job, but her father is still firmly in charge — and by all accounts, apparently healthy.

Interviews rare

Fidelity rarely makes executives available for interviews, and declined requests from The Associated Press. A recent statement issued by Ned Johnson on succession planning described a continuing process to “pass the corporation on in good operating order to the next generation of executives at the appropriate time.”

Whoever succeeds him, big changes are expected at the Boston-based company that’s the largest provider of Americans’ workplace-retirement-savings plans and a manager of nearly $1.6 trillion in assets.

Observers say Johnson’s successor won’t have as much power as he has wielded filling the chairman and chief executive roles since 1977 — posts that could be split between two people when his replacement is named.

And the private firm will face increasing pressure to operate more like a publicly held company, with greater attention to open governance, cost-cutting and short-term financial results.

“Whoever follows Ned Johnson can’t run it the way he has. The old model doesn’t work anymore,” said Bruce Raynor, co-chairman of the Council of Institutional Investors, representing public, labor and corporate pension funds.

Fidelity has recently diversified from its core mutual-fund business into areas such as individual retirement planning and employee-benefit management, after seeing only middling returns in recent years from key mutual funds that fueled rapid growth in the late 1980s and early ’90s.

Today, 46,400 Fidelity employees provide financial services to 23 million individuals.

Meanwhile, Vanguard Group and Capital Group’s American Funds have recently enjoyed greater success attracting investor money amid rising popularity of low-cost index and exchange-traded funds. Those investments don’t play off Fidelity’s strength as an active manager of funds that capitalize on the hottest stocks from day to day.

At Fidelity, Johnson family members hold 49 percent of Fidelity’s voting stock — and the company’s board consists solely of current or former company executives and Johnson family members.

The structure has come under criticism not only from activists like Raynor, but from Moody’s Investors Service. A November report on Fidelity’s creditworthiness questioned whether Ned Johnson and his family wield too much power, and said Johnson and other managers haven’t adequately defended the company’s once-dominant position in mutual funds.

Moody’s also said unresolved questions about leadership succession and recent management changes have created uncertainty that could hurt efforts to draw top talent to Fidelity.

Its competitors

Among its competitors, Los Angeles-based American Funds manages just 30 large funds compared with Fidelity’s 431, and eschews mainstream media advertising in favor of brokers’ recommendations to clients. Like Fidelity, American Funds is privately owned by employees, but without a dominant family like the Johnsons.

Vanguard, based in Valley Forge, Pa., touts low investment fees and expertise in index funds that passively track stocks of groups of companies. Vanguard is owned by its clients, with each fund contributing money to cover management, marketing and other costs.

Outsiders who advise Fidelity investors say the impending leadership change must be accompanied by a new business culture.

“I don’t think you have to read too far between the lines to understand that Fidelity is going to be run on a much tighter mandate, to be more accountable for how all its businesses operate, and to run a tighter ship,” said Jim Lowell, who runs the independent newsletter Fidelity Investor.

The recent upper-management shuffling has come fast. In April, Robert Reynolds left after 23 years at Fidelity, where many regarded him as Johnson’s right-hand man. Four months later, another former rising star, Ellyn McColgan, also left suddenly without lining up a new job.

Between the two departures, Johnson brought back Rodger Lawson as president. Lawson, 61, had left a Fidelity management position 16 years earlier.

Lawson brought together individual investments and workplace-savings operations, and carved out employee human resources into a separate unit. In an internal memo, Lawson indicated he wasn’t done.

Fidelity, he wrote, “must curb expenses where they are wasteful, not only to avoid waste, but to compete — and win — against some very tough rivals in an unforgiving marketplace.

This decade’s gains by American Funds and Vanguard show little sign of slowing. Through October, flows into Fidelity mutual funds totaled $6.1 billion — one-tenth the inflows at American Funds and Vanguard, according to data from Financial Research that don’t include bank account-style money-market funds, a category Fidelity leads.

Recent performance

However, things could begin turning around, based on a Morningstar report in November that found two-thirds of Fidelity’s equity funds beating their category averages through this year’s first 10 months. Fidelity credits the recent performance to its hiring of 120 U.S. equity analysts over the past two years, increasing the U.S. total to 246.

Some observers say Ned Johnson may want to wait to turn over the reins until he’s managed to improve Fidelity’s competitive footing.

Kobren picks Abigail Johnson as the most likely candidate to assume either or both of her father’s positions.

“Abby and her family own the company, and theoretically she can do what she wants with the family’s blessing. The question is whether she wants it or not.”