Money Management Executive articles from May 2004

Money Management Executive archives from May 2004

Equity Flows Ebb in MarchTo Half of January's Intake.
May 3, 2004... Equity funds pulled in $23.3 billion in March, less than half of the $50 billion gained in January, according to Lipper of New York. The $23.3 billion also represents about a 25% drop off from February's tally. Investors reduced their net...

Now Serving: A La Carte Fund Distribution.
May 3, 2004... Looking for a new back-office administrator for your mutual funds? Don't be surprised to see strategic and highly tailored distribution services served up as an a la carte menu item. Offering mutual fund advisors assistance in identifying,...

SMA Bigwigs Boil Down Client Issues.
May 3, 2004... BOSTON - In order to better translate client needs into action, separate account managers and sponsors must capitalize on strategic opportunities in the marketplace, according to Bob Cuhna, a principal at Market Metrics, a research firm that...

Janus Pays $226M for Two-Faced Behavior.
May 3, 2004... Janus Capital has reached agreements in principle with regulators that will cost the firm more than $226 million in restitution, fines and reduced fees for illegal market-timing activity at the firm, the fund shop said last week. Under...

SEC Might Take Action On Fair-Value Failures.(Brief Article)
May 3, 2004... The SEC is reportedly considering taking disciplinary action against firms that fail to follow fair-value guidelines for holdings with outdated prices. Even with the fair-value pricing investigation in its infancy and the number of firms being...

NASD Proposes Annuity Suitability Requirements.(National Association of Securities Dealers)(Brief Article)
May 3, 2004... Prompted by 80 disciplinary actions over unsuitable annuity sales in the past two years, the NASD last week issued a broad set of rules on how registered reps should sell deferred variable annuities. The rep will have to determine that the...

Boston May Lose PositionAs Nation's Fund Hub.(Brief Article)
May 3, 2004... The percentage of money put into Boston fund firms plummeted from 42% of the total market in 1994 to only 8% in 2003, thanks to the scandal and its effects on Putnam and MFS, but also to the growth of huge fund firms elsewhere, according to...

SEC Probes Fiserv Unit For Improper Fund Trades.(Brief Article)
May 3, 2004... A division of Fiserv is being investigated for possible improper mutual fund trading practices, the company's chief executive announced. Fiserv, which provides transaction processing and other back-office services for financial services firms,...

Executive Moves.(Sustainable Growth Advisers )
May 3, 2004... New York Life Names Four New Vice Presidents New York Life Investment Management has tabbed four new regional vice presidents, including a former Putnam manager, to help promote the firm's investment products. Cheryl Potter, formerly a...

MFS Talkin' Bout Generational 529 Plans.
May 3, 2004... With the cost of a four-year stint at a top liberal arts college expected to reach $300,000 by 2016, getting the word out on 529 college savings plans has never been more important. Still considered somewhat of an esoteric investment...

Seeing Fund Problems Ahead of the Curve.(Interview)
May 3, 2004... Max Rottersman has been pointing out problems in the mutual fund industry, shedding light on inconsistencies in data, and trying to drum up business for FundExpenses.com, a mutual fund data analysis firm based in New York, for which he serves...

PIMCO, Two Top Execs Hit with Fraud Charges.(Pacific Investment Management Co.)(Brief Article)
May 10, 2004... The hits just keep on coming. PIMCO last Thursday became the latest mutual fund company to be slapped with civil fraud charges for allegedly defrauding investors by secretly allowing hedge fund Canary Capital Partners to trade rapidly in...

Fund Directors' Salaries Up 13% to a Median $128,000.(Brief Article)
May 10, 2004... Separate studies by Equilar, a compensation specialist, and investment consultant Management Practice have both found that directors' salaries mostly held their ground and in some cases inched up in spite of high-profile regulatory probes of...

Amid MFS Trouble, Sun Life Turns 7% Profit.(Brief Article)
May 10, 2004... Despite the market-timing troubles at its mutual fund unit, Massachusetts Financial Services, which has settled with the SEC for a total of $410 million, Sun Life Financial announced a 7% profit for the first quarter against last year's...

I.D. Theft a Mounting Menace to Funds.(Identity theft)
May 10, 2004... Ever wish you were somebody else? Well, thieves have been making it happen at a more rapid pace, hijacking the identities of mutual fund customers and other patrons of the financial services industry and reeking havoc at an alarming rate. ...

Taxes Pose Biggest Threat to Stock Funds.
May 10, 2004... "For every benefit you receive, a tax is levied" - Ralph Waldo Emerson Equity mutual fund shareholders are losing 25% of their returns annually due to taxes paid on their investments, according to a recent study by fund tracking firm...

Earnings to Flex Muscle Amid Inflation Fears: US Bancorp Provides 04 Investment Outlook.
May 10, 2004... With chatter about deflation and a jobless recovery abating, the investment outlook for the rest of the year will be dominated by inflationary concerns and the quality of corporate earnings, according to several executives at US Bancorp Asset...

Putnam Reduces 529 Fees,Improves Cost Disclosures.(Putnam Investments)(Brief Article)
May 10, 2004... Putnam Investments last week announced it is improving the fee disclosure in Putnam CollegeAdvantage, the 529 plan it runs in Ohio, and also reducing the plan's annual maintenance fee. Beginning May 24, Putnam will include plain language...

Morningstar Senior Analyst Advises Selling Four Funds.(Brief Article)
May 10, 2004... The director of research at Morningstar has advised investors to sell four mutual funds in the research firm's weekly "Fund Spy" column. Saying that informed fund selling and buying decisions start with information like year-to-date...

Fidelity Offers New Tools For 401(k) Plan Investors.(Brief Article)
May 10, 2004... Fidelity Investments has announced a new program that will give the financial advisers who sell its 401(k) products better ways to inform those who invest in the plans. Selling it as a more personal touch, Fidelity's new service is called...

Executive Moves.
May 10, 2004... Auerbach Joins ICI to Lead Financial Services Policy Donald C. Auerbach, a veteran of both Capitol Hill and the financial services industry, has been named director of financial services policy at the Investment Company Institute. ...

Non-Proprietary Funds in DC Plans to Grab Assets.
May 10, 2004... Assets in investment products, including mutual funds, commingled funds, institutional separate accounts, as well as annuity sub-accounts in defined contribution plans, are expected to exceed the $1 trillion level by 2010, according to new...

Low Cost, Past Performance Unreliable Indicators: But Expense Analysis Can Put Investors on the Right Path.
May 10, 2004... When fund firms tell investors they should not use past performance as an indicator for future results, they should believe it, said Andrew Clark, a senior analyst at Lipper. When trying to choose an index-beating fund, a recent Lipper...

Fund Executives Likely to Rebound After the Fall.
May 10, 2004... Have you wondered what will become of the rapscallions who are guilty of ripping off mutual fund investors? The answer is to be found in the jumpsuit locker. If there is an orange jumpsuit in their future, as in going to jail, their...

Killing Soft Dollars Would Kill Independent Research.
May 10, 2004... Traditionally, bulge-bracket firms have given away research in exchange for trading volume and high trading commissions. The commissions paid for part of the research, while investment-banking fees paid for the rest. Over time, Wall Street...

Data: Yesterday's Storage Problem, Today's Business Driver.
May 10, 2004... When it comes to information management, companies can be like the sailor who, in a 19th century poem, exclaims, "Water, water everywhere, nor any drop to drink." For financial services firms, potentially useful data springs from a multitude of...

Community Banks Discover the Potential in SMAs.(separate or individually managed accounts)
May 10, 2004... Managed accounts, a cornerstone product for big brokerages, are now also becoming increasingly popular at community banks, industry experts say. These accounts, also called separate or individually managed accounts, are portfolios created for...

Harry Nikpour Promoted to Associate Publisher.(Thomson Media)(Brief Article)
May 10, 2004... Thomson Media, publisher of this newsletter, has promoted Harry Nikpour from advertising sales director to associate publisher of the investment management newsletters. In this role, Nikpour's advertising responsibilities will be broadened to...

Legg Mason Earnings Up 56% to $297.8 Million.(Brief Article)
May 17, 2004... For the fiscal year ended March 31, Legg Mason generated $297.8 million in net earnings, a 56% increase over last year. Total revenue for the year was $1.941 billion, a 29% uptick from last year, marking the second straight year that Legg Mason...

Morningstar to Sell up to $100M in Initial Offering.(Brief Article)
May 17, 2004... Research firm Morningstar has filed an initial public offering statement with the Securities and Exchange Commission to sell shares of common stock in the company. While leaving the number of offered shares and the prices of those shares...

NASD Spearheads Project To Better Educate Investors.(National Association of Securities Dealers)(Brief Article)
May 17, 2004... The NASD recently announced a $10 million project to be run by its not-for-profit Investor Education Foundation to better educate investors on financial markets. The foundation will work with other not-for-profit groups and researchers to...

With Federal Regulators.(Janus Capital Group)(Brief Article)
May 17, 2004... Janus Discussing Brokers Janus Capital Group is telling the Securities and Exchange Commission about its relationships with brokers. One month after settling with the SEC for $226 million for its participation in improper trading, the...

Illinois Senator Goes to Bat for Investors.
May 17, 2004... Sen. Peter Fitzgerald has two wishes this year. One is that Congress passes sweeping legislation to reform the $7.5 trillion mutual fund business, an industry that hasn't seen new legislation since the FDR administration. The other wish is...

Roye: Putting the Force Back at the SEC.
May 17, 2004... Few people in the mutual fund industry, outside of those who have been charged in the scandal, have been under as incredible pressure or faced as tough questions in the past few months as Paul Roye, the nation's top cop for the mutual fund...

Top Agency Broker Hard-Pressed to Defend Soft Dollars.
May 17, 2004... With longstanding mutual fund practices such as directed brokerage and revenue sharing likely headed for the junk pile, the heated debate over the merits of soft-dollar research commissions has intensified. The discussion over soft dollars...

Advisers Believe Scandal Contained to Limited Few.(Brief Article)
May 17, 2004... Most financial advisers share their clients' level of concern about the mutual fund scandal, according to a survey of 124 financial advisers conducted by Select Sector SPDRs, for which State Street Global Advisors serves as investment advisor....

Morningstar Recommends Sell on Four Mutual Funds.(Brief Article)
May 17, 2004... The director of research at Morningstar has advised investors to sell four mutual funds in a recent "Fund Spy" column. Saying that informed fund selling and buying decisions start with information like year-to-date performance and analyzing...

Executive Moves.(appointments)
May 17, 2004... Phoenix Capital Resources Names Poeta Director, SVP John Poeta, an attorney who most recently worked for the investment banking division of a Northeast law firm, has been named senior vice president and director of Phoenix Capital...

For Galvin, Admitting Guilt is First Step For Reform.(William Galvin)
May 17, 2004... William Galvin makes no apologies for his outspoken nature or his insistence on twisting the arm of Putnam Investments until the firm cried "uncle." He has been dubbed the Prince of Darkness by his adversaries and has been accused of...

Scandal Fallout: ETFs, Small Niche Managers Win.
May 17, 2004... In the wake of the mutual fund scandal, exchange traded funds (ETFs), small niche managers and fund groups not implicated in the scandal have been raking in assets and pumping up their relative market share of the industry's $5 trillion in...

It's the Conflict of Interest, Stupid.
May 17, 2004... Mutual fund industry critics need not look far to find the root cause for the industry's scandals. The problem lies in the industry's predominant governance structure. Aside from the Vanguard Group, external management is the order of the day,...

Cost Keeps Small Business Owners Nervous About Offering Retirement Plans.
May 17, 2004... Despite the acknowledged importance of retirement savings, the cost of offering a defined contribution plan keeps many small business owners from offering them. The Employee Benefit Research Institute s (EBRI) most recent Small Employer...

Former ICI President Calls for Fresh Thinking on Reform.
May 17, 2004... Regulators are searching for a rescue plan for the fund industry scandals, but the effort is doomed if the rulemakers continue in-the-box thinking, said David Silver, former president of the Investment Company Institute. Silver red flagged...

Fundgate: Where Are They Now?
May 17, 2004... Most in the mutual fund industry will remember 2003 as the year of the scandal. New York Attorney General Eliot Spitzer, guns blazing and fresh off his monumental settlement with the Wall Street brokerage firms, unleashed a bombshell on...

Advisers Widely Divided on How to Sell Separate Accounts How advisers, and ultimately clients, perceive SMAs makes a big difference in whether anyone chooses to go with them.
May 17, 2004... Whether separately managed accounts are ultimately a product or a process, they ultimately require convincing the client to sign on the dotted line. In fact, SMA clients have to sign on many dotted lines. And as with any sales process,...

Education of Agents Key in Equity Index Sales.
May 17, 2004... ORLANDO - Worried that equity index annuities (EIAs) are too complicated for the average insurance agent? Apparently, you're not alone in those fears, as education remains a high priority for marketers of EIAs, especially following last fall's...

Technology Played Key Role in BoA Trading Scandal: Underscores Need for More Controls in Clearing Systems.
May 17, 2004... Back-office technology is now emerging as having played a role in the fund scandal, requiring fund companies to take a fresh look at their clearing systems. New York Attorney General Eliot Spitzer's complaint against Canary Capital for...

Putnam Still Making Amends with Investors: It's the third 529 provider to cut fees on its plan, and it won't be the last.
May 17, 2004... Hit last October with charges of fraud in the mutual fund investigations, Putnam Investments has been losing close to $3 billion in assets a month as investors cut and run. In an effort to shore up its reputation, the Boston mutual-fund giant...

Segmenting Fund Sales by Adviser Type, Not Channel.
May 17, 2004... Mutual fund marketers have maintained for decades that sales is a game of building trust through face-to-face meetings with clients. Put specialized wholesalers in front of different types of financial advisers, and sales are bound to rise....

Operations' Role in Fund Reform.
May 17, 2004... Last year began well enough. But in September, as the first shock waves hit, scandals were revealed and other problems within the fund industry became front-page news, the year turned somber. Investigations escalated, and the U.S. Senate...

Issuers Await Uniform State Standards.
May 17, 2004... It's going to be a lot easier to bring products to market in the near future. Or is it? The Interstate Compact National Standards Working Group of the National Association of Insurance Commissioners (NAIC) is expected to adopt national...

NASD Cleans Up Variable Annuity Market: Regulator tires of abuses and looks to making best practices required practices.(National Association of Securities Dealers)
May 17, 2004... After filing over 80 disciplinary actions in the past two years, the National Association of Securities Dealers is tightening its noose on the variable annuities industry. Late last month, the regulator proposed new rules for variable annuity...

Roye Challenges ICITo Rise to the Occasion.
May 24, 2004... WASHINGTON The Investment Company Institute and its membership are at a crossroads, said Paul Roye, the Securities and Exchange Commissions director of the division of investment management before the ICI General Membership Meeting here...

Security in Spotlight, as Breaches Rise.(Internet security)
May 24, 2004... BOSTON Despite the rampant increase in e-crimes and high-tech scams, cyber experts here said that firms need not build the Fortress of Solitude to protect their computer systems and networks from hackers and viruses. However, they should...

529 Plans Next in Line on Capitol Hill.(529 college savings plans )
May 24, 2004... State-sponsored 529 college savings plans are the latest investment vehicle to draw scrutiny from legislators, as Congress prepares for a series of hearings to examine their fees, broker commissions and tax efficiency. Both the House and...

Investors Take Fund Scandal in Stride.
May 24, 2004... Ask your average mutual fund investor what impact the scandal has had on them, and what do you think you will hear? Outrage? Expletives? A sermon on how the fund industry should never have gotten into trouble in the first place? Not...

NASD Fund Task Force To Make Costs Clearer.(Brief Article)
May 24, 2004... The National Association of Securities Dealers has formed a mutual fund task force to recommend ways to make fund costs and distribution agreements more transparent to investors. Members of the mutual fund and broker/dealer communities will sit...

Independent Directors Join Together in Council.(Brief Article)
May 24, 2004... A group of independent directors has formed the Independent Directors Council to provide education and create a forum to discuss policy issues. The council, an offshoot of the Directors Committee of the Investment Company Institute, will be...

Niche Value Manager Cambiar Chooses Slow Growth.(Cambiar Investors)
May 24, 2004... Being a value-oriented investment management shop based in Denver, a city well-known for growth managers including Janus Capital, Invesco and Founders Capital, it can sometimes feel like you are a fish swimming against the tide. But...

Executive Moves.
May 24, 2004... Amex Promotes Moen To Vice President, National Sales Manager Steven J. Moen, an 18-year American Express veteran, has been promoted to vice president, national sales manager of the American Express Retirement Services. Just prior to the...

CIOs Tackle Outsourcing Concerns.(Boston Outsourcing )
May 24, 2004... BOSTON Outsourcing has been on the minds of chief investment officers as current market and regulatory challenges have pushed the practice to the forefront of the business worlds focus, according to participants in a CIO roundtable discussion...

Outsourcing Fulfillment Improves Marketing Returns.
May 24, 2004... Fulfillment is a key, but often underestimated, aspect of an effective marketing communications effort. The appropriate collateral fulfillment program for your company should greatly assist your business goals, ensuring a quick and measurable...

Small-Cap Funds Fare Better in Worst of Times.
May 24, 2004... When searching for opportunities to reap big returns amid a market slump, it pays to think small. Thats what fund-tracking firm Lipper had to say about comparing the performance of large-cap mutual funds to small-cap mutual funds. In the...

April Equity Flows Slow To $9.9B, Lipper Reports.
May 31, 2004... Equity fund flows slowed to $9.9 billion in April, half of March's pace, marking the third month in a row they have declined 50% or more from their previous month's levels, Lipper reported. In fact, April's net equity flows were only 80% of...

Gut Check for Mutual Funds at ICI Summit.(Investment Company Institute)(Panel Discussion)
May 31, 2004... "The closer you get to the fire, the more you get burned, but that won't happen to us, because it's always been a matter of trust." - Billy Joel WASHINGTON - The words of this famed Long Island crooner have a striking resemblance to the...

ICI Bigwigs Appear Humbled at GMM.(Investment Company Institute General Membership Meeting)
May 31, 2004... WASHINGTON - In a far departure from the self-congratulatory back-slapping that went on at last year's Investment Company Institute General Membership Meeting, the largest mutual fund industry gathering of 2004 featured a more humble tone from...

Fink Fights Off Fastballs Amid Curtain Call.(Matt Fink)
May 31, 2004... WASHINGTON - Matt Fink didn't exactly go gentle into that good night during his last days at the helm. The Investment Company Institute president of 13 years made his last public appearance at the mutual fund trade group's General...

Strong Settles for $175M; Is Bought by Wells Fargo.(Strong Capital Management)
May 31, 2004... The bidding is over for the scandal-tarnished Strong Capital Management. Wells Fargo reached a definitive agreement last week to purchase Strong's $27 billion in mutual fund assets and $7 billion in institutional investment assets. Although...

Executive Moves.
May 31, 2004... Kirkpatrick & Lockhart Names Parker Of Counsel Timothy Parker, a veteran asset and regulatory management lawyer, was named Of Counsel at Kirkpatrick & Lockhart's San Francisco office. He will specialize in the area of investment management....

CCO Questions Loom as Fall Deadline Approaches.(chief compliance officers)
May 31, 2004... WASHINGTON - Fund firms will be required to sport a chief compliance officer come October, but many gathered here at the Investment Company Institute's General Membership Meeting had unanswered questions and not a lot of time to find solutions....

Industry Leaders Look to Restore Investor Loyalty.
May 31, 2004... WASHINGTON - Putting the interests of investors first and fostering investor loyalty were two of primary topics at the Investment Company Institute's annual General Membership Meeting here. While acknowledging the mutual fund scandal that...

Japanese Broker Pairs With FOLIOfn on New SMAs.(separately managed accounts)
May 31, 2004... If you think it's challenging to convince your clients to open a separately managed account, imagine the work Yoshishige Saigusa, CEO of Nikko Cordial Advisors, a unit of Japan's third-largest brokerage, has cut out for him. Nikko Cordial...