Fidelity's latest executive adieu

She was once a contender for the corner office, but Ellyn McColgan couldn't compete with a tough opponent: family.

By Patricia Sellers Fortune editor-at-large

(Fortune) -- The resignation of Ellyn McColgan - Fidelity Investments' fastest-rising star and Abby Johnson's main rival for the CEO job - is a shocker to insiders and many followers of the mutual fund giant. Yet in certain respects, her exit was inevitable.

McColgan built Fidelity into America's largest brokerage. In April, she took on broad sales and operations duties that put her in charge of nearly half of the company's 42,000 employees.

McColgan's exit: Such a shock?

Her rapid ascension also gave her an ever-widening edge over Abby, 45, who heads the firm's 401(k) and employer benefits business, gets mixed reviews for her management over the years, and is the daughter of CEO Ned Johnson.

But people who know Ned, 77, understand that he keeps an iron grip on the firm his father founded. And he is hardly the type of owner-boss to pass the reins to a pipe-fitter's daughter from Jersey City, as McColgan proudly claims to be.

McColgan, 53, had made it clear to friends that she wants to be a CEO and that she had hoped it would happen at Fidelity. She, among others, was surprised when Fidelity announced in mid-July that Rodger Lawson, 60, a Fidelity alum who recently was vice chairman of Prudential Financial, would return as president.

Lawson's official arrival on Monday, August 6, put a layer between McColgan and Ned. And it clearly tipped her decision to leave. Now McColgan, who declined to comment for this story, is known to be looking for a CEO job elsewhere in the financial services industry or in the not-for-profit arena.

Meanwhile, Fidelity faces the huge task of restocking its ranks following a dizzying series of high-level departures. Chief operating officer Bob Reynolds left unexpectedly in April. Stephen Jonas, who was executive director of the firm's investment management division, quit in January. Fidelity subsequently launched a search for a chief administrative officer as well as a new investment-management boss but at least for now is sticking with its in-house talent.

Given the latest shakeup - and uncertainty over whether Lawson or daughter Abby possess what it takes to run Fidelity - maybe Ned should be hanging out another shingle: Wanted - Fidelity's Next CEO.  Top of page