At Fidelity, old star is rising anew

They are Fidelity Investments' new odd couple.

Rodger Lawson is a gregarious Brit comfortable in front of an audience and prone to flashy suits. His new boss epitomizes the patrician New Englander, the famously reticent chairman and chief executive of Fidelity, Edward C. "Ned" Johnson III.

At a distance, it's not easy to fathom how Johnson matched with Lawson, who in just his first week as president of Fidelity is already more of a leading candidate to succeed the 77-year-old Johnson, now that another possible heir apparent, Ellyn McColgan, abruptly resigned Tuesday.

Yet if opposites attract, Lawson has many attributes and skills needed at a time when Fidelity is facing change and competition, both inside the executive suite and out in the consumer market. He was previously a star at Fidelity and pioneered marketing and advertising around the early low-cost mutual funds and retirement savings accounts of the industry, two key areas of competition for the company now.

"He's very good at figuring out ways to make money," said Susanne Lyons, a former marketing executive for Visa USA who had worked with Lawson at Fidelity.

And in a company that has repeatedly lost senior executives who had groomed themselves for the top, Lawson, who last worked at Fidelity 16 years ago, has another trait that may be crucial in Johnson's eyes: loyalty.

"Despite his wanderings, he has never said a negative word about Fidelity -- he is a true believer," said Donald H. Putnam of Grail Partners, a financial investment-banking firm. "That makes him the perfect agent for change." For example, Putnam said, although Lawson will try new ideas, he knows what strategies Johnson would be unlikely to embrace, such as expanding through acquisitions or raising money through a public stock offering.

Lawson and Johnson have declined numerous interview requests. A spokeswoman for the company said Johnson has no immediate plans to step back, but that Fidelity has a succession plan.

It's unclear how Lawson's position, and McColgan's departure, affect Johnson's daughter, Abigail P. Johnson, the head of Fidelity's big employer-services unit who also recently became vice chair of the board of directors of Fidelity parent FMR Corp.

Analysts and industry people who follow Fidelity said Lawson's new authority likely caused McColgan to quit four months into a powerful position as head of Fidelity's distribution operations -- one that elevated her standing as a potential Johnson successor. In July, Fidelity said McColgan would report to Lawson, and not directly to Johnson, and these people said she likely found the subordination untenable.

In a statement Tuesday, Fidelity would say only that McColgan "resigned in order to pursue opportunities outside of the company." Through a spokeswoman, McColgan declined to comment.

At Fidelity, Lawson will oversee products sold directly to consumers, including its online brokerage business and big retirement-services unit, meaning that even Abigail Johnson will report to him. Lawson will not oversee mutual funds operations; those top executives still report to Johnson.

The 60-year-old Lawson rejoins Fidelity at a critical time. While its overall assets under management continue to grow, Fidelity has not increased sales as fast as American Funds and the Vanguard Group Inc., and some of its well-known mutual funds, including Magellan, have posted years of middling returns.

Johnson has spent heavily to expand other business lines, such as its services unit and the online brokerage business that McColgan built into a powerhouse. But these are businesses with lower profit margins that require billions of dollars of investment.

For Lawson, one task now will be to introduce new products for the retirement market, an area of growing competition among fund companies, insurers, and banks, said Colin Devine, a Citigroup Inc. analyst who follows Lawson's previous employer, Prudential Financial Inc. in New Jersey.

He has experience in this area. As chief executive of Fidelity Investment's retail operations from 1985 to 1991, Lawson made his name as a savvy marketing figure. He helped create the company's low-cost Spartan money-market and bond funds and its diversified Asset Allocation products. The company's money market and bond funds remain a strength to this day.

During this period, federal rule changes led to the expansion of individual retirement accounts. Former Fidelity executives credit Lawson with finding ways to market these aggressively to individual investors by promoting the hot performance of certain Fidelity mutual funds at the time, such as the giant Magellan fund, then run by star manager Peter Lynch.

"Nobody understood the potential as early and as fully as Rodger," said Bill Baughman, a former Fidelity marketing executive and now a financial-services consultant.

Lawson also centralized Fidelity's marketing, ending a system where ads for particular mutual funds varied widely. Baughman said Lawson also introduced a company logo that persists today, a stylized version of the pyramid on the back of the $1 bill. "Rodger took Fidelity from an army of uncoordinated product managers to a focused brand," he said.

Lawson left for Bankers Trust Co. in 1992 and wound up at Prudential Financial in 1996, where he rose to become vice chairman of its international division in 2002. One success for Lawson in that role, according to Devine, the analyst, was to expand life insurance sales in Japan, both by introducing professional agents and by acquiring other companies.

During his time away, Lawson remained in Johnson's sights. Lyons and others said the two kept in touch over those 16 years.

"In a way he's become an insider over time," Lyons said. "Ned likes to surround himself with people who are on the inside . . . and unless you've known him for 10 or 20 years, you're not an insider." Recently, Johnson turned to two other old Fidelity hands, James Curvey and John J. Remondi, to help run the company.

Lawson stepped down from Prudential in March. Citigroup's Devine says he likely left after judging he wouldn't emerge on top in a succession plan now playing out at the company.

Just a few months later, he has moved closer to the top after the first corporate shuffle in his brief second career at Fidelity. And that may suggest Lawson possesses another skill common in successful executives: timing.

Ross Kerber can be reached at kerber@globe.com.