Investment News articles from April 2003

Investment News archives from April 2003

Tale of woe highlights need for financial advice; A one-way ticket to lottery whiplash.(News)
April 7, 2003... Byline: Sara Hansard A recent U.S. Tax Court case highlights why lottery winners need professional financial guidance. In 1991, Mary Boehme of Mooresville, Ind., hit the Colorado State Lottery for $1.5 million, which she was supposed...

Reverse Spin: Two firms breathe big sigh of relief.(Briefs)
April 7, 2003... Byline: Frederick P. Gabriel Jr. The titans of Wall Street are choosing their words very carefully these days. Morgan Stanley and The Goldman Sachs Group Inc. won't be cited for fraud in an industry securities settlement. This should...

Moving Up.(News)
April 7, 2003... * PFPC Inc. in Wilmington, Del., a member of the Pittsburgh-based PNC Financial Services Group Inc., has named Elizabeth A. Nystedt, 50, president and chief executive of Automated Business Development Corp., a Boston subsidiary of PFPC...

Rising costs chill entries into hot biz; Some wait or limit exposure to wraps, managed accounts.(News)
April 7, 2003... Byline: David Hoffman What was once considered a gold mine has turned into an expensive proposition for mutual fund companies, giving pause to some firms even as others plunge into the managed-account business. Wrap-fee and...

Taking Sides: It takes a village to make a soup.(Opinion)
April 7, 2003... Long ago, as the old Eastern European folk tale goes, a hungry minstrel was traveling through a famine-ravaged land when he entered a small village. He inquired where he might find a meal for a song but was told to go away by the...

Columbia 529 plan targets advisers.(News)
April 7, 2003... Byline: Frederick P. Gabriel Jr. Columbia Management Group Inc., the asset management arm of FleetBoston Financial Corp., plans to unveil a 529 college savings plan offering that will be sold through financial advisers. The move is...

Fast Track: Financial Engines aims to rev up advice.(News)
April 7, 2003... Byline: Brooke Southall Financial Engines Inc. is like a car powered by Ferrari. But the Palo Alto, Calif., company still needs to develop the steering and handling to match all that horsepower. William J. Thompson, the company's...

Monday Morning: Boards must rein in exec compensation.(News)
April 7, 2003... Byline: Mike Clowes Corporate boards of directors still don't understand the depth of investor skepticism about their ability to oversee the management of companies. And CEOs still don't understand that their personal greed helps fuel...

Short Interests: Opportunity to help Iraqis Pax a punch.(Briefs)
April 7, 2003... Byline: Tessa van Staden, Brooke Southall and Rick Miller Investors can provide humanitarian aid to Iraqi citizens via the Pax World Balanced Fund, based in Portsmouth, N.H. The fund contributes financial assistance to Pax World Service, a...

Deferred compensation could be next casualty, advisers fear; Enron fiasco puts savings plan in the cross hairs on Capitol Hill.(News)
April 7, 2003... Byline: Sara Hansard Deferred-compensation plans, one of the last ways for middle-level managers to save enough money for retirement, may be marked for extinction. That's the chief concern of financial advisers and other business...

On-staff advisers provide guidance; American Century offers free rollover advice.(News)
April 7, 2003... Byline: Rick Miller American Century Investments is stepping into financial advisers' shoes but insists it's not stepping on any toes in the process. In what it calls a first for the industry, the Kansas City, Mo., mutual fund group...

LSA-faire stance wrong for college savers; 529 plans have advantages over the Bush-proposed savings vehicle, and it doesn't pay to wait.(Opinion)
April 7, 2003... Byline: Richard A. Davies President Bush's recently proposed tax-advantaged savings plans have spurred considerable debate among politicians, financial advisers and families over their virtues and potential drawbacks. Since his first...

One on One: "I always say it's tough markets like this where you earn your living".(News)
April 7, 2003... Byline: David Hoffman The $4.95 billion Pioneer Fund celebrates its 75th anniversary this year. The well-respected fund is the fourth-oldest in the United States, according to the fund's adviser, Pioneer Investment Management USA Inc....

Conference Call: ICI head speaks out against intense regulatory push.(News)
April 7, 2003... Byline: Frederick P. Gabriel Jr. The mutual fund industry is feeling picked on. In a speech at a conference for fund lawyers last week, Matthew P. Fink, president of the Investment Company Institute in Washington, criticized the...

At the Bell.(Late News)
April 7, 2003... Two MetLife firms losing president Dick Miller, president of the soon-to-be consolidated Walnut Street Securities Inc. of St. Louis and Nathan & Lewis Securities Inc. of New York, unexpectedly resigned last week. His last day at the firm...

Street Wise: Calvert Group's case for shorter-duration bonds.(The Markets)
April 7, 2003... Byline: Jeff Benjamin Good news for the risk-averse: When it comes to fixed income, a conservative strategy may make the most sense. Reno Martini, chief investment officer at Calvert Group Ltd. in Bethesda, Md., makes a case for...

In off year, these cats get fatter; Fund board directors collect a big pay raise.(News)
April 7, 2003... Byline: Rick Miller The job of a mutual fund director, viewed by some as one of the best gigs for the money, now pays better than ever. Compensation for directors at the 50 largest fund groups rose 8.2% in 2002, and the median pay at...

Separates pioneer: Time for disclosure; Too many sponsors shroud fees, he says.(News)
April 7, 2003... Byline: Jeff Benjamin An industry pioneer claims that today's managed-account sponsors are shrouding the composition of fees in a veil that should be torn down. The sponsors of such accounts who don't provide a breakdown of the fees...

Help spurned on the home front; Government discourages some offers of free financial planning.(News)
April 7, 2003... Byline: Rick Miller Seeing the sacrifices U.S. troops are making on the battlefield, financial planners want to show their support in the best way they know how. But their efforts to offer free planning services to the families of...

Blame goes around for breakdown on break-point discounts; Buck passed on fund overcharges.(News)
April 7, 2003... Byline: Frederick P. Gabriel Jr. Tension is rising between federal regulators and the mutual fund industry over who is to blame when brokerages overcharge investors on additional purchases of certain mutual funds. Everyone agrees that...

Datebook.(Calendar/Datebook)
April 7, 2003... APRIL 21-24 - Annual Spring Compliance Conference, National Regulatory Services. Westin La Paloma Resort, Tucson, Ariz. (860)435-0200 or nrs-inc.com. 23-27 - 2003 National Conference, National Association of Professional Financial...

At Issue; It's no secret: Agents resisting change by Bush.(Opinion)
April 7, 2003... Besides the obvious Democratic objections to President Bush's retirement savings proposal, I believe he is not getting the support he typically would receive from the Republicans on Capitol Hill, because of the life insurance lobby. There...

Bernstein opus not sweet music to the inflexible; The noted investment guru had the gall to say that the sacrosanct asset allocation approach isn't realistic for these times.(Opinion)
April 7, 2003... Byline: Charles L. Larson Wow! Talk about creating a stir, as Peter Bernstein did with his remarks at a recent gathering of endowment and foundation trustees. Some might even suggest that Mr. Bernstein's words caused more than just a...

Taking Sides: Congress must avoid overkill on deferred compensation.(Opinion)
April 14, 2003... Every so often, there are times when it would be worth just about anything to be a fly on the wall. A case in point would be the last days of Enron Corp., the Houston energy conglomerate that collapsed in scandal and touched off a wave of...

Monday Morning: Mutual fund fees in need of an overhaul.(News)
April 14, 2003... Byline: Samantha Chang Despite a relatively pristine image, the mutual fund industry needs to roll up its sleeves and get its hands dirty if it wants to maintain investor confidence during these troubling economic times. With fund...

Moving Up.(News)
April 14, 2003... * Northern Trust Corp. in Chicago has named William Knapp managing director, personal investment management. In this new position, Mr. Knapp, 41, will focus on investment strategy, asset allocation and investment process. He previously was...

Hedge funds hiding; Cash piles up as high-priced managers fiddle.(News)
April 14, 2003... Byline: Jeff Benjamin Hedge fund investors who thought they were buying top-drawer investment advice may be getting nothing more than high priced cash management instead. Cash is piling up in hedge funds at a growing rate, suggesting...

Product Watch: Tool speeds comparison with rivals' annuities.(News)
April 14, 2003... Beacon Research Publications Inc. of Evanston, Ill., a source of fixed-annuity information and related software tools, now offers the Annuity Nexus sales support system to help staff members support advisers with accurate information on...

At Issue; A designated hitter seeks (Page 1) position.(Opinion)
April 14, 2003... In a constant attempt to be contrarian, InvestmentNews appears to grasp straws with the article on the new qualified financial planner designation. A front-page article on a group that claims to have only 100 members stretches credibility to...

Tax Watch: Another four months to file? It's automatic, the IRS says.(News)
April 14, 2003... Byline: Mark Battersby It must be that time of the year again. The Internal Revenue Service is reminding individuals that they - or their preparers - can request, by paper, electronically or by phone, an automatic four-month extension of...

Retail head winds seen as too strong.(News)
April 14, 2003... Byline: Brooke Southall It's the end of an era, says a new study that boldly declares the death of retail brokerage. Individual investors have lost confidence in financial advisers, having sidelined $500 billion into consumer cash...

Can Wall Street survive? Greed, upheaval testing wirehouses; Old business model may no longer fly.(News)
April 14, 2003... Byline: Brooke Southall Ever since the great crash of 1929, Wall Street has endured every imaginable regulatory change, scandal and market upheaval. But the most recent binge of greed and excess, and a market that may be chronically...

Short Interests: 401(k) advice tool thinks for investors.(Briefs)
April 14, 2003... Byline: Rick Miller and David Hoffman Morningstar Inc.'s 401(k) advice tool, ClearFuture, now comes with a special feature: a brain. The Chicago investment research firm now has a service in which in-house investment experts use the...

Shareholders get less info in reports; Funds pare loose talk.(News)
April 14, 2003... Byline: Frederick P. Gabriel Jr. Mutual fund executives may dumb down shareholder reports to avoid running afoul of a new law requiring them to swear to their accuracy. The rule, which is part of the Sarbanes-Oxley Act of 2002, is...

Datebook.(Calendar/Datebook)
April 14, 2003... ***** Correction: A non-functioning web address for the June 12-13 Pershing LLC Vision 2003 Financial Products and Services Conference has been running in the Date Book. The operable address is: www.pershingconference.com/ps2003. ...

Reverse Spin: Grim outlook for corporate America; @@Byline: Frederick P. Gabriel Jr.(Briefs)
April 14, 2003... Byline: Frederick P. Gabriel Jr. Well, this might explain all the long faces coming out of corporate boardrooms this year. Executives at top companies are expecting this year's economic picture to be even grimmer than last year's, with...

Fast Track: Refocus at Zurich Life nets promotion.(News)
April 14, 2003... Byline: Rick Miller While its struggling parent, Zurich Financial Services Group, is still in the throes of an effort to return to profitability, Zurich Life has already completed its own process of introspection. Linda K. Wagner, the...

Equitable distribution of monies, arbitration reform issues at the forefront; Analyst settlement causes new headaches.(News)
April 14, 2003... Byline: Sara Hansard As the dust settles, tensions are mounting over how the $1.5 billion in global settlement money stemming from analyst conflict-of-interest arbitration will be doled out. Equitable-distribution and arbitration...

Tennessee may tax earnings on out-of-state 529s; Raises collection, compliance issues.(News)
April 14, 2003... Byline: Sara Hansard Tennessee has lobbed the latest attack on out-of-state Section 529 college savings plans. The Tennessee Department of Revenue issued a notice April 1 warning that Tennessee residents invested in out-of-state...

Conference Call: AARP seeks regulation of all investment advisers.(News)
April 14, 2003... Byline: Sara Hansard AARP is seeking comprehensive regulation of investment advisers. ``In general, we believe Congress should provide for the regulation of investment advisers,'' Charles Leven, AARP vice president-secretary/treasurer,...

PaineWebber pays Price to link brokers, products; Former Pru exec's challenge is to execute strategy.(News)
April 14, 2003... Byline: Bruce Kelly Jamie Price, the new director of investment and marketing solutions at UBS PaineWebber Inc., is the linchpin between the firm's retail brokers and the array of financial services products under the umbrella of Swiss...

One on One: "You've got to be an awfully smart money manager to overcome a 2% head wind".(News)
April 14, 2003... Byline: Frederick P. Gabriel Jr. Robert A. Garvy is giving Janus a new, more conservative face. His firm, Enhanced Investment Technologies LLC, is managing a new line of ``risk-managed'' mutual funds for its new parent, Denver-based...

At the Bell.(Late News)
April 14, 2003... Vanguard funds sue Citigroup units Several funds offered by The Vanguard Group Inc. in Malvern, Pa., have filed a fraud lawsuit in Pennsylvania's Chester County against two Citigroup Inc. subsidiaries and an offshore entity. Citibank...

Street Wise: Good banks and thrifts come in small packages.(The Markets)
April 14, 2003... Byline: Jeff Benjamin When it comes to bank stocks, thinking big might not be the best strategy. An evaluation of the 100 largest publicly traded banks and thrifts over the past five years presents a solid argument for digging deep...

Pristine mutual fund firms feel investor wrath in court; Lawsuits on rise; stronger cases involve brokerage funds.(News)
April 14, 2003... Byline: David Hoffman The fund industry likes to brag that it's free of scandal, but investor wrath is another matter. Lawsuits filed against mutual fund companies increased in number by about 25% between 1998 and 2002, according to...

Bank of America cranks up ambitions for a brokerage; Chairman Lewis sets his sights on 550 offices in three years.(News)
April 21, 2003... Byline: Bruce Kelly Kenneth D. Lewis, chief executive and chairman of Charlotte, N.C.-based Bank of America Corp., has made no secret of his desire to build up the company's retail brokerage sales force. Over the next three years, Mr....

Tax Watch: 10 states join IRS' offshore amnesty initiative.(News)
April 21, 2003... Byline: Mark Battersby The Internal Revenue Service has announced that a total of 10 states have indicated they will grant special consideration to any individuals who applied for protection under the agency's Offshore Voluntary Compliance...

At the Bell.(Late News)
April 21, 2003... State Street equity research head quits The director of equity research at State Street Research and Management Co. in Boston has resigned. Cliff Krauss, who joined State Street in August 2000, left to pursue other opportunities. ...

Legal, but just barely; Firms falling short on good governance.(News)
April 21, 2003... Byline: David Hoffman Companies may be meeting the requirements of the Sarbanes-Oxley Act, but recent proxy statements show they are still falling short on good governance, a handful of gadflies say. Leading the charge is Bruce Ellig,...

Secondary offering creates adviser power bloc; NAT raises $2M, adds 26 firms.(News)
April 21, 2003... Byline: Brooke Southall Its dream was deferred once, but National Advisors Trust Co. wasn't going to make the same mistake twice. The Overland Park, Kan., de facto cooperative of independent advisers did far more than raise $2 million...

Product Watch: Ginnie Mae to pool hybrid adjustable mortgages.(News)
April 21, 2003... The Department of Housing and Urban Development has announced new initiatives at Ginnie Mae designed to enhance the agency's portion of the U.S. secondary-mortgage market. Ginnie Mae will create a securitization program to pool hybrid...

One on One: "We tell people that if the market did nothing, we'd beat half the people out there".(News)
April 21, 2003... Byline: Brooke Southall Nicholas D. Gerber is a stickler for cost management. And it's with a certain passion the portfolio manager of the Ameristock Fund discusses how little he spends and how little he trades. His penny-saved...

Seller's market rules for advisory firms; Drive to replace lost revenue propels buying spree.(News)
April 21, 2003... Byline: Rick Miller This may come as a surprise, but the market for those selling financial advisory firms is as strong as ever. A recent report indicates that from 2000 to 2002, the average down payment rose 17%, and the median...

Reverse Spin - Janus stunner: Star manager to leave.(Briefs)
April 21, 2003... Byline: Frederick P. Gabriel Jr. It must be nice to be able to retire before your first Botox treatment. Helen Young Hayes, the well-known fund manager and chief investment officer at Janus Capital Management LLC, shocked the mutual...

Monday Morning: Japan's economic woes may offer lessons.(News)
April 21, 2003... Byline: Mike Clowes The Japanese economy has suffered through 14 years of almost continuous recession, and Japan's stock market has hibernated for the same length of time. Japan went into recession in 1990 and still hasn't recovered,...

Taking Sides: Association health plans worthy despite flaws.(Opinion)
April 21, 2003... The health-care crisis continues to pain the nation, and the issue is only likely to grow in importance for advisers. Most Americans are reminded of the crisis every time the open their paychecks, which are being hit hard by the ever-rising...

Conference Call: ICAA conference speakers slam fund regulation.(News)
April 21, 2003... Byline: Brooke Southall Just a smattering of companies bothered to set up booths this month at the 65th annual conference of the Investment Counsel Association of America in San Francisco, but they missed some fireworks. Speakers at...

Street Wise: Font firm sets its sights on next-generation tech.(The Markets)
April 21, 2003... Byline: Jeff Benjamin Twenty years of developing typeface technology may soon pay off for Bitstream Inc. (BITS). The Cambridge, Mass., company is the market leader in three relatively obscure business segments all related to the...

Can shorting Treasuries quell rate fears? Rydex, ProFunds offer unusual - and risky - funds.(News)
April 21, 2003... Byline: David Hoffman Interest rates - currently at all-time lows - have to go up eventually. For investors who think that that possibility is right around the corner, Rydex Funds of Rockville, Md., and ProFunds of Bethesda, Md., may...

Ghosts of Jack White's past resurface.(News)
April 21, 2003... Byline: Brooke Southall What is old is new again in serving smaller independent financial advisers. Peter A. Mangan and Robert O. Reed, both formerly among the top brass at Jack White & Co., are starting up a similar firm in that...

Funds sweating proxy policies; Race is on to draft rules by deadline.(News)
April 21, 2003... Byline: Frederick P. Gabriel Jr. With the deadline fast nearing, mutual fund companies are scrambling to comply with a controversial new rule requiring them to disclose how they cast proxy votes on behalf of shareholders. For most...

A feeding frenzy for advisers; Waterhouse, Ameritrade circle as Vanguard ends custody biz.(News)
April 21, 2003... Byline: Brooke Southall With the blood of Vanguard advisers in the water, the sharks are circling. The Vanguard Group Inc. made plans to cast adrift about 400 of its advisers in March, when it announced it would no longer provide...

King of index portfolios faces usurper to throne; Tax loss strategy drives new trend in managed accounts.(News)
April 21, 2003... Byline: Jeff Benjamin With $4.5 billion in taxable assets, Parametric Portfolio Associates in Seattle has owned the indexed-separate-account business, but it's about to get competition. Active Index Advisors LLC in San Francisco is...

Commonwealth moving up in independent ranks; Expansion draws top-producing reps.(News)
April 21, 2003... Byline: Bruce Kelly Commonwealth Financial Network in Waltham, Mass., is trying to set the gold standard among independent broker-dealers. Through recent expansion efforts, the firm of 850 brokers has joined the ranks of the most...

Fast Track: Putnam takes steps to repair its image.(News)
April 21, 2003... Byline: Frederick P. Gabriel Jr. Joshua H. Brooks is determined to improve communication among analysts and fund managers at Putnam Investments LLC. Mr. Brooks, 35, joined Putnam two weeks ago as managing director and director of...

T. Rowe fund seen poised for growth; International offering, ablaze in '99, reopens.(News)
April 21, 2003... Byline: David Hoffman Once a big winner but recently a victim of sour foreign stock markets, the T. Rowe Price International Discovery Fund reopened to new investors late last month. The fund, offered by T. Rowe Price Associates Inc....

Short Interests: Schwab CEO wants to spice things up.(Briefs)
April 21, 2003... Byline: Brooke Southall, Rick Miller and Bruce Kelly Cost-cutting at Charles Schwab & Co. Inc. could be seasoned with curry if CEO David S. Pottruck has anything to say about it. ``I'd love to put some of my call centers into India,''...

At Issue; To SunAmerica rep, AIG group still shines.(Letters)
April 21, 2003... I was offended by your March 24 article [``Reps: AIG cramping our style''] attacking the AIG Advisor Group broker-dealers. In particular, I was upset by the lack of balance in your reporting. In my opinion, it is untrue that the AIG Advisor...

Datebook.(Calendar/Datebook)
April 21, 2003... APRIL 23-27 - 2003 National Conference, National Association of Professional Financial Advisors. The Nugget, Reno, Nev. (800)366-2732 or info@napfa.org. 27-30 - Spring Development Conference, Investment Management Consultants...

Moving Up.(News)
April 21, 2003... * Mellon Financial Corp. in Pittsburgh has elected James F. Orr III to its board of directors and has named James D. Aramanda a vice chairman. Mr. Orr, 60, has been chairman of The Rockefeller Foundation in New York since 2000 and was...

Product Watch: Pershing offers access to Merrill Lynch funds.(News)
April 28, 2003... Pershing LLC of Jersey City, N.J., has agreed to make available to its 850 broker-dealers and their 4.7 million clients access to Merrill Lynch Investment Managers LLP's group of mutual funds. Pershing will make the funds available through...

Requests for proposal key to hedge fund gain; Focus on back-office due-diligence issues.(News)
April 28, 2003... Byline: Chris Clair Not all requests for proposal are equal, particularly when it comes to hedge funds. Two facts will illustrate this in the future, say consultants, fund managers and investors: Institutional assets directed toward...

Reverse Spin: War, weather beat up U.S. economy.(Briefs)
April 28, 2003... Byline: Frederick P. Gabriel Jr. Quick! Somebody get a cane for this ailing economy. The economy limped along in the first quarter, according to a Department of Commerce report released Friday. Gross domestic product grew by a...

Tax Watch: IRS faces heat over drop-off in tax prosecutions.(News)
April 28, 2003... Byline: Mark Battersby Criminal enforcement of the nation's tax laws by the Internal Revenue Service has plummeted to an all-time low, according to the Transactional Records Access Clearinghouse, which researches data. ``Tax...

Taking Sides: Social Security reform still urgent.(Opinion)
April 28, 2003... Efforts to reform Social Security appear to have been pushed aside by the Sept. 11 attacks, the wars in Afghanistan and Iraq, and President Bush's efforts to get a significant tax cut to stimulate economic growth. At present, Social...

Hedges maintain edge over the broad market.(News)
April 28, 2003... Hedge funds continue to outperform the broad market equity indexes, according to Van Hedge Fund Advisors International Inc. The Nashville, Tenn.-based hedge fund research firm reports that its U.S. hedge fund index, which includes funds of...

Fast Track: Investor relations group stresses basics.(News)
April 28, 2003... Byline: Sara Hansard It is a tough time to be leading an organization for investor relations executives. But at least it isn't last year, which was chock full of corporate scandals. Mark Aaron, vice president of investor relations for...

One on One: "We are seeing ... growth in real disposable income, which is very positive".(News)
April 28, 2003... Byline: Rick Miller To improve New York-based Scudder Investments' large-cap-growth fare, parent Deutsche Asset Management went to the land of beer and cheese. Last fall, Deutsche hired away Julie Van Cleave from Mason Street Advisors...

FPA, CFP Board wires crossed; FPA seen as jumping the gun.(News)
April 28, 2003... Byline: Sara Hansard The Financial Planning Association has suggested to the Securities and Exchange Commission that the Certified Financial Planner Board of Standards Inc. be viewed as a model for regulating financial planners. ...

Monday Morning: Shareholder proxies are a call to action.(News)
April 28, 2003... Byline: Mike Clowes I'm making a New Year`s resolution a little late this year - right now, in fact. The resolution? To start voting my shareholder proxies. Lately, almost every day when I get home, I find another annual report,...

Lawsuit may prove a no-win for funds; Should managers sue their sister brokers?(News)
April 28, 2003... Byline: David Hoffman A lawsuit filed this month by several Vanguard Group Inc. mutual funds could give funds offered by other mutual fund companies a real headache. That's because if the Vanguard funds win their suit against...

Break points haul Schwab into court; 3 Wall St. firms also sued in Calif.(News)
April 28, 2003... Byline: Brooke Southall Renowned class-action lawyers are using a consumer-friendly California statute to sue Charles Schwab & Co. Inc. for allegedly bundling mutual fund purchases made by customers and then not passing on the savings to...

Taking Sides: Let the sunshine in on Street.(Opinion)
April 28, 2003... The details of the settlement between Wall Street firms, the Securities and Exchange Commission, and state officials over charges of conflicts of interest in securities research are expected to be announced this week. Yet there are...

Companies may take stock on option issue; TIAA-CREF pressure may be paying off.(News)
April 28, 2003... Byline: David Hoffman It appears companies are finally getting the message about stock options, according to TIAA-CREF. The New York-based money manager mentioned Tuesday during a teleconference it had identified 50 companies it...