Investment News articles from April 2004

Investment News archives from April 2004

Stock options proposal stirs debate; High-tech industry quickly attacks plan.(News)
April 5, 2004... Byline: Sara Hansard Financial advisers who have many clients with stock options are concerned that the proposal issued last week by the Financial Accounting Standards Board may make it uneconomical for companies to continue issuing...

One on One: "Probably, within five years, we're going to be serving in the range of 80 to 100 families".(News)
April 5, 2004... Byline: Jeff Benjamin Michael D. Miller didn't set out to be a financial adviser. His original plan was to become a professional freestyle skier, and to finance that endeavor, he set off right out of high school to Alaska, where he spent...

Monday Morning: High costs of small-caps hurt returns.(News)
April 5, 2004... Byline: Mike Clowes Between 1926 and 2002, small-cap stocks outperformed large-cap stocks, returning 12.1% a year versus 10.2% a year compounded annually, according to Chicago-based Ibbotson Associates Inc.'s annual study. Over the 30...

Reverse Spin: Edward Jones finds itself in hot seat.(Briefs)
April 5, 2004... Byline: Frederick P. Gabriel Jr. It looks like the Joneses are keeping up with the rest of the mutual fund industry. The Securities and Exchange Commission is weighing the idea of an enforcement action against Edward D. Jones & Co. LP...

Street Wise: Mid-cap-value analysts in no rush to find stocks.(The Markets)
April 5, 2004... Byline: Jeff Benjamin Quarterly numbers don't really impress the analysts behind the $400 million Davis Opportunity Fund (RPEAX). According to Chip Tucker and Kent Whitaker - two of six analysts responsible for the 20-year-old...

Taking Sides: Congress needs to repair retirement's 3-legged stool.(Opinion)
April 5, 2004... Federal Reserve Board Chairman Alan Greenspan was correct to warn Congress that it must tackle the looming Social Security crisis, but he ignored two equally threatening retirement problems. The first is the slow decline of the private...

Kerry's tax plan called double-edged sword; Advisers concerned proposal won't help industry overall.(News)
April 5, 2004... Byline: Sara Hansard The corporate-tax plan proposed by Sen. John Kerry, D-Mass., may be a double-edged sword for the financial services industry and financial advisers. The leading Democratic presidential nominee's proposal to end...

Nations Funds trustees may be sticking around; Only board, not regulators or B of A, can boot members.(News)
April 5, 2004... Byline: Frederick P. Gabriel Jr. Trustees of Bank of America Corp.'s Nations Funds may not be going anywhere after all - at least not against their will. New York Attorney General Eliot L. Spitzer put mutual fund directors on notice...

At the Bell.(Late News)
April 5, 2004... Bush supports fund initiatives * The Bush administration supports the mutual fund initiatives taken by the Securities and Exchange Commission, Treasury Secretary John Snow said Friday at a meeting in Scottsdale, Ariz., held by The...

SEI to focus resources on all-star producers; A business gamble for industry leader, some say.(News)
April 5, 2004... Byline: Brooke Southall In what some analysts call a risky move, SEI Investments Co. is culling thousands from its Advisor Network and directing the resources it saves to a few hundred all-star producers. The Oaks, Pa., company has...

Tax Watch: Bogus shareholder loans don't increase basis.(News)
April 5, 2004... Byline: Mark Battersby The 8th U.S. Circuit Court of Appeals, agreeing with the U.S. Tax Court, has ruled that a series of circular shareholder loans to S corporations that were controlled by the same individual couldn't increase his basis...

AmEx pushed fund families, suit says; Class action focuses on client suitability.(News)
April 5, 2004... Byline: Jeff Benjamin American Express Financial Advisors Inc. has been charged in a class action with enticing its financial advisers to direct client investments into a group of 12 mutual fund groups with which it has established unique...

SEC forms task force to detect fund fraud; Critics skeptical about agency's efforts.(News)
April 5, 2004... Byline: Joanna Sabatini Fallout from the mutual fund trading scandals is causing the Securities and Exchange Commission to try to turn itself into a more effective regulator. Part of the transformation, the SEC said, is to create a more...

Finding billions in unlikely places; DFA successfully solicits CPAs.(News)
April 5, 2004... Byline: Brooke Southall Dimensional Fund Advisors Inc. is quietly finding adviser assets in multibillion-dollar chunks by looking in an unlikely place: the world of certified public accountants. The Santa Monica, Calif.-based...

Financial advice pioneer John B. Keeble dies; Left his footprint on the industry.(News)
April 5, 2004... Byline: Bruce Kelly John B. Keeble III, a longtime brokerage executive who was a pioneer in the independent-brokerage and financial advice industry, died Feb. 19 after a 12-year battle with multiple myeloma, a cancer of the plasma cells in...

At Issue: 12(b)-1 fee worth saving as way to pay for the basics.(Opinion)
April 5, 2004... By the 1990s, many of us who had been financial planners for more than a few years faced a dilemma every few months. Shall I: * Rid my business of so many small clients, and focus on fewer, higher-net-worth clients? * Hire a new rep...

Datebook.(Calendar/Datebook)
April 5, 2004... APRIL 13-16 -Nineteenth annual Spring Compliance Conference, National Regulatory Services Inc. Hyatt Regency Coconut Point Resort and Spa, Bonita Springs, Fla. (860)435-0200 or nrs.inc.com. 14-15 - Third annual Hedge Fund Analytics...

529s place some reps in a quandary; NASD violations loom if not properly handled.(News)
April 5, 2004... Byline: Rick Miller As NASD investigates six major brokerage firms for possibly exposing investors to unnecessary taxes by selling them out-of-state Section 529 plans, the Financial Planning Association has raised concerns that the inquiry...

Short Interests; Nader should be proud: Green index beats market.(News)
April 5, 2004... Byline: Christine S. Lee, Rick Miller and Sara Hansard Green begets green, according to a Winslow Management Co. study that shows that companies that are good to the environment are also good to their shareholders. The Boston-based...

CFP Board registers new planning programs; 178 schools now offer 292 programs.(News)
April 5, 2004... Byline: Christine S. Lee The Certified Financial Planner Board of Standards Inc. in Denver has increased the number of board-registered programs to 292 at 178 colleges and universities across the country with the addition of eight...

Ethical wills catch on as part of estate planning; Some clients want to pass on more than money.(News)
April 12, 2004... Byline: Joanna Sabatini When it comes to estate planning, some financial advisers are talking to clients about passing on more than just material wealth to their heirs. Those advisers say ethical wills are becoming more popular among those...

Reverse Spin: Putnam pays hefty price to move on.(News)
April 12, 2004... Byline: Frederick P. Gabriel Jr. Apparently, closure doesn't come cheap. Putnam Investments LLC on Thursday agreed to pay $110 million to put federal and state allegations of improper mutual fund trading behind it. The settlement calls...

A do-gooder is determined to fare better; Citizens goes in-house to boost performance.(News)
April 12, 2004... Byline: Joanna Sabatini About a year after losing staff during a reorganization, socially conscious mutual fund company Citizens Advisers Inc. is still undergoing management changes. The firm's chief investment officer, Jim Schappe,...

We can't ignore corporate greed.(Opinion)
April 12, 2004... Socially conscious investors have long ignored a glaring inequity in the behavior of many corporations: the huge disparity between the compensation of top executives and that of rank-and-file employees. The issue of excessive compensation...

Insurance market reform debated; Agent group backs Oxley-Baker plan.(News)
April 12, 2004... Byline: Sara Hansard A group that represents life insurance agent-advisers has come out in favor of a proposal that would stop short of creating the optional federal charter that life insurance underwriting companies are pushing. The...

Small money manager bets on bonds; James Investment Research thinks stocks are overvalued.(News)
April 12, 2004... Byline: David Hoffman James Investment Research Inc. is a small Xenia, Ohio, money manager swimming against the tide of public opinion. Although many market experts think bonds will suffer in the near future - taken down by what they...

One On One: "It's a thrill and a real charge to have people trust you with their life savings".(One On One)
April 12, 2004... Byline: Frederick P. Gabriel Jr. David A. Geller wasn't an ordinary child. While other 11-year-old boys were out tossing balls or building treehouses, he was tracking the daily price changes in the stocks that made up his father's...

Investor education group takes shape; Non-profit byproduct of Wall St. settlement.(News)
April 12, 2004... Byline: David Hoffman An investor education plan proposed by the Securities and Exchange Commission, in connection with a $1.4 billion settlement reached last year with 10 Wall Street brokers and two individuals over analyst conflicts of...

Short Interests: Some retirement dreams may become nightmares.(Briefs)
April 12, 2004... Byline: Sara Hansard and Frederick P. Gabriel Jr. Despite a recovering economy and efforts to educate the public about the importance of saving for retirement, the percentage of Americans doing so remains stagnant. That was the finding of...

Future looks bright for annuity sales; Fixed variety expected to take off.(News)
April 12, 2004... Byline: Rick Miller The future of variable annuity sales looks bright, but not as dazzling as it appears for fixed annuities. VA sales are predicted to reach $150.4 billion in 2004, up from $129.2 billion in 2003, according to LIMRA...

Tainted firms leading revival of the fund ad; A four-year decline in spending likely to end.(News)
April 12, 2004... Byline: Frederick P. Gabriel Jr. As investor confidence in the stock market rebounds, and some mutual fund companies embroiled in the trading scandals attempt to rebuild what's left of their reputations, fund company advertising is on the...

Lawyer takes on arbitration process; Sues NYSE over proceedings in case against Prudential.(News)
April 12, 2004... Byline: Bruce Kelly In a fit of frustration over a continuing $23 million securities arbitration claim at the New York Stock Exchange, a plaintiffs attorney is cracking open the guarded, almost secretive, process of securities arbitration....

Fund industry faces new battle; More than 100 civil suits could result in huge settlements.(News)
April 12, 2004... Byline: David Hoffman The mutual fund industry is still battling regulators over trading abuses, but that fight may cost it less than the one it now faces with angry investors. At least that is what is being said by some attorneys...

SEC can learn from police to update crime fighting.(Opinion)
April 12, 2004... Financial planners, investment advisers and mutual fund investors should welcome the steps the Securities and Exchange Commission is taking to improve its oversight of the securities industry - particularly the mutual fund component. But...

Tax Watch: Private debt collectors to recoup unpaid taxes?(News)
April 12, 2004... Byline: Mark Battersby A recently released study from the Department of the Treasury found that the Internal Revenue Service's failure to follow up on cases of tax delinquency cost the government almost $16.5 billion in tax revenue last...

Most check `yes' on ADV question about use, though unaware of how; Prohibitions on soft dollars could cost advisers, clients.(News)
April 12, 2004... Byline: Sara Hansard Financial planners are worried that likely changes in the way "soft dollars'' are regulated could cost them and their clients. Until the debate over soft dollars broke out, many advisers were unaware that their...

New global model separates pros, non-pros; U.S. firms adapting well to paradigm shift in serving investors.(News)
April 12, 2004... Byline: Angela C. Allen A new trend in customer segmentation is realigning the global money management industry as it responds to the increasingly sophisticated demands of clients, with some U.S. firms saying they are already ahead of the...

Closing Quote.(Quotes)
April 12, 2004... "I'm not really sure how we really use soft dollars.'' Rob Hoxton, managing member of Hoxton Financial LLC, who is also chairman of the Financial Planning Association's government relations committee. Page 3

At the Bell.(Late News)
April 12, 2004... Economist draws 33-month sentence A economist formerly with The Goldman Sachs Group Inc. was sentenced to nearly three years in prison Friday for relaying an insider tip that allowed the New York-based firm to make millions of dollars in...

Monday Morning: Wealth involves far more than income.(Commentary)
April 12, 2004... Byline: Mike Clowes Politicians of all stripes frequently refer to "the wealthiest Americans.'' Most often, they misuse the term - probably deliberately. Generally, they are referring to people who earn high incomes, but those people...

Streetwise: Managing rate exposure without breaking a sweat.(News)
April 12, 2004... Byline: Jeff Benjamin Investing in fixed income when interest rates are likely to rise is always a dicey proposition. But as Daniel S. Vandivort, manager of the $145 million WPG Core Bond Fund (WPGVX), has shown, interest rates don't...

A flip-flop on block transfers; Phoenix breaks vow to broker-dealer's reps.(News)
April 12, 2004... Byline: Bruce Kelly Citing regulatory guidance, the parent of a broker-dealer in the midst of being acquired is going back on its word to its registered representatives looking to leave the firm before the deal is completed. The...

H.D. Vest beginning to roll up its sleeves; Wells unit adding 2,000 to rep ranks, a 33% jump.(News)
April 12, 2004... Byline: Brooke Southall The largest provider of financial services delivered through tax professionals plans to add as many as 2,000 advisers to its ranks by yearend. H.D. Vest Financial Services plans to increase its rep force by 33%...

Monday Morning: Clients shouldn't gamble on retirement.(News)
April 19, 2004... Byline: Jim Pavia Many Americans who are gearing up for that once-almost-unimaginable time known as retirement are apparently uttering the words "if only.'' It is evident that everyone is aware that they must save for retirement....

Unified managed accounts seen fueling growth of already-hot separates; Mad scramble begins to develop platforms.(Managed Accounts)
April 19, 2004... Byline: Jeff Benjamin The separately managed accounts industry, estimated at $500 billion and growing fast, has collectively zeroed in on the advantages of the unified managed account model. The idea of placing a client's entire...

Product Watch: BISYS enhances compliance package.(News)
April 19, 2004... The BISYS Group Inc. in New York has released an enhanced package of independent and comprehensive legal, regulatory and compliance services designed to help its mutual fund and hedge fund management clients develop and maintain efficient and...

Panel.(Investment News Round Table)
April 19, 2004... Norman Mindel, executive vice president, GE Independent Accountants Network in Schaumburg, Ill. Linda Hartley, CFP, chairperson, Financial Planning Association of New York, and managing director, Silvercrest Asset Management Group LLC in...

Investment News Round Table.
April 19, 2004... Mr. Pavia: Linda, what do you see as the biggest challenge facing the financial planning industry in the next three to five years? Ms. Hartley: Managing the clients' and investors' expectations going forward. In view of what's gone on in...

Reverse Spin; Spitzer to Grasso: Give us the money.(Briefs)
April 19, 2004... Byline: Frederick P. Gabriel Jr. And you thought your suits cost a pretty penny. Try getting one from New York Attorney General Eliot L. Spitzer. The word around Wall Street is that his office is considering a lawsuit to recover the...

Roth 401(k): Next big thing in 2006? But `sidecar IRA' hasn't caught on.(News)
April 19, 2004... Byline: Rick Miller Some cutting-edge options for 401(k) plans could be either a boon or a bust for the retirement savings market. Either way, helping in- vestors sort through the little-known changes will likely fall into the hands of...

The Hartford aims to boost fund business; Plans to spend $20 million on advertising this year.(News)
April 19, 2004... Byline: Rick Miller The Hartford Financial Services Group Inc. is aiming to be a major player in mutual funds, as it is in annuities, and it's backing up the effort with real dollars. The Connecticut insurer has beefed up its...

Move to ban doubling up is debated; Some say it would cause mutual fund brain drain.(News)
April 19, 2004... Byline: Sara Hansard Many financial advisers who increasingly are investing clients' assets in hedge funds support legislation that would bar portfolio managers from jointly managing mutual funds and hedge funds. Yet industry experts...

Lincoln unit watching its pennies; Ex-Merrill exec leads drive to cut costs, simplify operations.(News)
April 19, 2004... Byline: Bruce Kelly Lincoln Financial Advisors Corp. is in the midst of a dramatic "Merrillization.'' Since taking the helm of Lincoln in early 2003, Robert W. Dineen, a former top executive at Merrill Lynch & Co. Inc. and one-time...

Oversight concerns aren't registering with hedge funds; Some feel registration may widen distribution.(News)
April 19, 2004... Byline: Jeff Benjamin Despite heated debate about increased regulatory oversight of hedge funds, the $420 billion industry has yet to muster much of an argument against requiring its managers to register as investment advisers with the...

Taking Sides: SEC's new rules shine bright light of disclosure.(Opinion)
April 19, 2004... The Securities and Exchange Commission has properly imposed new rules on mutual funds to halt rapid trading of fund shares and the preferential treatment given to some investors. To be sure, given the impact of the continuing market-timing...

Short Interests; Capital gain distributions: How low can you go?(News)
April 19, 2004... Byline: Sara Hansard, Brooke Southall, Bruce Kelly and Rick Miller Mutual fund capital gains distributions in 2003 totaled about $14 billion, the lowest amount since 1990, the Investment Company Institute reported. The Washington-based...

Schwab's new sales manager reflects emphasis on advisers; Kevin Rowell to be chief contact with 5,100 in network.(News)
April 19, 2004... Byline: Brooke Southall Schwab Institutional has named a new national sales manager as it boosts the profile of that position to reflect the increasing importance of financial advisers to its growth plans. The adviser arm of San...

One on One: "There has been a raised awareness of hourly financial advice as an option".(News)
April 19, 2004... Byline: Joanna Sabatini Certified financial planner Sheryl Garrett thinks she has created a business model that allows her - and hundreds of planners like her - to deliver financial advice to a broader group of clients. She has adopted...

Moving Up.(News)
April 19, 2004... * The Phoenix Cos. Inc. in Hartford, Conn., has hired Bruce Pomper, 42, as a senior vice president, investment consultant for its asset management subsidiary, Phoenix Investment Partners Ltd. He represents Phoenix mutual funds and...

Directory of separate-account managers.(Managed Accounts)
April 19, 2004... Brandes Investment Partners (All information as of Dec. 31) 11988 El Camino Real Suite 500 P.O. Box 919048 San Diego, CA 92191-9048 (858) 755-0239 (800) 237-7119 Contact: Ed Blodgett, director of...

Advisory firms feel pressure; Need to improve training, education, panelists say.(Investment News Round Table)
April 19, 2004... Byline: Frederick P. Gabriel Jr. With baby boomers barreling toward retirement, demand for professional financial advice is sure to skyrocket in the years ahead. That, in turn, will put intense pressure on financial advisory companies...

Help control investor expectations.(Opinion)
April 19, 2004... Investors have short memories. Already, there are signs that many have forgotten the lessons of 1999 and 2000. They are again pouring money into equities, especially the hot equity funds, chasing performance. February and March saw...

Advisers support SEC's market timing rule; FPA sees disclosure aiding due diligence.(News)
April 19, 2004... Byline: Sara Hansard Financial advisers may be the chief beneficiaries of the first mutual fund reform rule to be adopted in final form by the Securities and Exchange Commission. "We're pleased,'' said Duane Thompson, group director...

Tax Watch: Preparer claimed illegal slavery tax credits.(News)
April 19, 2004... Byline: Mark Battersby A former tax return preparer in Washington recently pleaded guilty to falsifying federal income tax returns for herself and her clients by illegally claiming more than $500,000 in tax credits as reparations for the...

At the Bell.(Late News)
April 19, 2004... Piper to launch UMA platform * Minneapolis-based securities firm Piper Jaffray & Co. this week is expected to announce its move into the white-hot unified managed account business with the launch of its own platform. The UMA style,...

Merrill on track to meet hiring goals; Adviser ranks rise a 3rd straight quarter.(News)
April 19, 2004... Byline: Brooke Southall The biggest bull on Wall Street is emerging from the bear market with a vengeance, but some think its rampage will be slowed by an aging client base. Merrill Lynch & Co. Inc. has completed a third straight...

Street Wise: Hitching a ride on turnaround via truck route.(The Markets)
April 19, 2004... Byline: Jeff Benjamin When George Henning started seeing signs of an improving economy, his first move was toward the trucking industry. The manager of the $12 million Pacific Advisors Small Cap Fund (PASMX) positioned his portfolio...

Product Watch: Barclays launching iShares, Morningstar-style.(News)
April 26, 2004... Barclays Global Investors in San Francisco will license 16 style-based indexes from Morningstar Inc. in Chicago. Barclays' iShares Trust has filed with the Securities and Exchange Commission a prospectus for nine iShares Morningstar...

Financial services prep courses go high tech; Willett Institute will still offer live classes.(News)
April 26, 2004... Byline: Liz Skinner Having trained more than 80,000 financial services professionals since 1969, the Willett Institute of Finance in Boston is expanding to cyberspace. The school's preparation courses for the Series 7...

Conference Call: Microfinance groups could use a hand, study finds.(News)
April 26, 2004... Byline: Joanna Sabatini Organizations that lend small sums of money to poor rural entrepreneurs in countries with developing economies will serve their purpose better in the long run if they improve their governance, according to a study...

At the Bell.(Late News)
April 26, 2004... NAPFA to launch foundation * Michael Joyce, chairman of The National Association of Personal Financial Advisors, the fee-only-planner group based in Arlington Heights, Ill., said Thursday that it plans to set up a foundation for consumer...

Migration to independent advisers under way; Affluent investors switch from brand-name brokers.(News)
April 26, 2004... Byline: Brooke Southall The success of independent financial advisers in siphoning assets from full-commission brokers is raising eyebrows, with Charles Schwab & Co. Inc. reaching a notable milestone in the first quarter. The San...

Legal fees funds pay are expected to rise; Shareholders may wind up holding the bag.(News)
April 26, 2004... Byline: David Hoffman In the wake of the mutual fund trading scandals, expect legal fees accrued by funds - fees shareholders are likely to end up paying - to increase. It isn't that mutual fund companies will pass along the cost of...

Documentation is name of VA game; Companies asked to prove suitability.(News)
April 26, 2004... Byline: Rick Miller Document, document, document. That is the mantra of Stephen Toretto, insurance counsel for Newport Beach, Calif.-based Pacific Life Insurance Co., who tries to drill this idea into the heads of independent agents...

Mass-market advice website aims high; Hopes to have 50,000 clients within a year.(News)
April 26, 2004... Byline: Joanna Sabatini After signing on dozens of experienced financial planners for Myfinancialadvice Inc., founder and president Ron Peremel is looking for distribution deals with discount brokers and employee-benefit providers to boost...

American College launches retiree issues designation; Skeptics cite failure in marketing ChFC.(News)
April 26, 2004... Byline: Rick Miller The American College this month introduced a designation geared to retirement issues, and vowed to make sure it doesn't falter due to lax promotion, as has its chartered financial consultant designation. "We see...

Taking Sides: No need for an SRO - yet.(Opinion)
April 26, 2004... The mutual fund industry doesn't need a self-regulatory organization - yet. In that, Sen. Paul Sarbanes, D-Md., is correct. As reported in this issue (see page 16), Mr. Sarbanes sees no pressing need for a mutual fund industry SRO "at...

Short Interests: Viatical brokers urged to straighten up and fly right.(Briefs)
April 26, 2004... Byline: Sara Hansard and Brooke Southall An organization that represents life insurance agent financial advisers has called for the licensing and testing of viatical brokers. The National Association of Insurance and Financial Advisors...

Moving Up.(News)
April 26, 2004... * The Bond Market Association in New York has hired Marjorie Gross, 55, as senior vice president and regulatory counsel. She will be responsible for a variety of cross-market legal, regulatory and market practice initiatives. Ms. Gross...

Conference Call: Sarbanes questions need for a fund SRO.(News)
April 26, 2004... Byline: Sara Hansard There is no pressing need to look at setting up a self-regulatory organization for mutual funds, Sen. Paul Sarbanes, D-Md., said last week. Speaking at the annual public-policy conference sponsored by the North...

Brecek & Young to wed insurance product supplier; Deal marks Security Benefit's first retail-broker-dealer acquisition.(News)
April 26, 2004... Byline: Bruce Kelly Brecek & Young Advisors Inc., a midsize independent broker-dealer in Folsom, Calif., specializing in retirement planning, will be acquired by one of its biggest suppliers of insurance and annuities products. ...

SIA: Disclosure costs dwarf profits; Estimates SEC fund rule price tag at $17.4B in first year.(News)
April 26, 2004... Byline: Bruce Kelly The mutual fund disclosure rules proposed by the Securities and Exchange Commission would cost the securities industry $17.4 billion in first-year implementation costs and $11.4 billion annually, according to the...

Are discounts still eluding investors? Some break-point refunds may be calculated incorrectly.(News)
April 26, 2004... Byline: Sara Hansard Brokerage firms that failed to give customers correct discounts for mutual fund purchases still may be having trouble making the right refunds. Lawrence West, associate director of the Securities and Exchange...

Monday Morning: Warren Buffett needs to walk the walk.(News)
April 26, 2004... Byline: David Hoffman The Oracle of Omaha has shown us how to improve the mutual fund business: take away the fund advisory contracts from the companies in which he has an interest. That is probably not the way Warren E. Buffett would...