Mr Augar, who joined Schroders four year ago from NatWest with a mandate to build up a UK and European equities capability for the firm, said he was taking time out to write a series of books about the City.
He denied that the decision was linked to any plans by Schroders to cut back on the business.
Mr Augar said: "We have delivered all we set out to deliver. A personal decision is not any sign of reduced commitment. I hope to stay at Schroders as long as I am welcome."
He added: "It would be odd to be quitting equities in a year when we have more than doubled our market share, led a major privatisation in the telecoms sector, and moved into the top ten in the research rankings for UK and Europe." As chairman he will continue to run the equities business three days a week.
He raised eyebrows the length and breadth of the City when he left NatWest - which at the time was regarded as the one of the most powerful stockbroking firms in the City - after six years for a merchant bank which had tried and failed to build up a UK equities business once before.
Mr Augur, 46, plans to write two books: one on the impact of the "Big Bang" on the City and one on wider aspects of management.