Investment News articles from April 2009

Investment News archives from April 2009

Art imitates work.
April 6, 2009... Byline: Charles Paikert Just because you squint at numbers while working on a financial report doesn't mean you can't also be inspired to produce a work of art. It happened recently to Keith Loveland, a compliance consultant and...

A crisis, straight up.
April 6, 2009... Byline: Bruce Kelly The boys from "South Park'' turned in a nifty lesson last month on the collapse and stagnation of the U.S. economy. The Comedy Central show is known for its biting satire of current events, politics, celebrities and...

At the Bell.
April 6, 2009... ING's Simmers to step down John Simmers will retire as chairman and chief executive of the ING Advisors Network, he told advisers during a conference call last week. Mr. Simmers, 58, will remain in an advisory role with the...

Upcoming events.(Calendar)
April 6, 2009... April 7 Adviser-to-Adviser Webcast: "Maximizing Retirement Income Now'' How to recover lost assets to meet the income needs of retirees and near-retirees. Panelists: Beth L. Blecker, Bart R. Bonga and Pamela Hess Moderators: Evan Cooper,...

Regulator to weigh return of uptick rule; Short-sellers unfazed by the possibility of more regulation, see move as sign of times.
April 6, 2009... Byline: Jeff Benjamin Short-sellers could find themselves back in the spotlight when the Securities and Exchange Commission meets Wednesday to consider reinstating the controversial uptick rule. The rule, which prohibits a short sale...

Insurers slow production of fixed-index annuities; Aviva, Midland, North American, EquiTrust, Fort Dearborn make moves to dampen sales.
April 6, 2009... Byline: Darla Mercado Insurers, concerned about conserving capital, have put the brakes on their fixed-index-annuity production, a move that advisers say could put a crimp in their business. Carriers, including Des Moines-based Aviva...

Crisis challenges long-held investing truths.
April 6, 2009... Two important lessons of the current bear market are that stocks don't always outperform bonds over significant time periods and that investors can't assume a 10% annual return over the long run. The implications are that investors and...

Trouble at family businesses may spell opportunity for advisers; Owners need help with tough succession, retirement decisions.
April 6, 2009... Byline: Charles Paikert Financial advisers and planners may benefit from the economic crisis' impact on retirement and succession planning for family businesses, according to observers. "Family businesses could use a lot of help right...

Technology shortcomings dishearten advisers; Software solutions to most advisory business problems exist, but require persistence to identify.
April 6, 2009... Byline: Davis D. Janowski Advisers are frustrated with current software options because they are difficult to integrate, hard to use and more complex than they need to be. These problems have plagued the financial advice business for...

Fiduciary standard an issue in unifying advisory regulations; Some financial advisers are fearful of a watered-down version if Finra prevails.
April 6, 2009... Byline: Sara Hansard A consensus appears to be developing in Washington under which Finra could gain regulatory control over investment advisers in return for requiring all of them, including brokers, to come under fiduciary standards. ...

ETF providers hope funds will be used to absorb toxic assets; They say that if the Treasury plan fails, their offerings may be worth a second look.
April 6, 2009... Byline: David Hoffman Some providers of exchange traded funds hold out hope that the government will still turn to ETFs to purchase toxic assets illiquid real estate loans and securities backed by loan portfolios from banks. Right...

Finra arbitration awards may mean gains for investors; Decisions against Merrill, Credit Suisse, were among largest ever.
April 6, 2009... Byline: Bruce Kelly Finra securities arbitration panels have handed investors two huge wins in recent months, but lawyers and industry observers are divided about whether such noticeable awards signal favorably for investors. ...

Patience wears thin for AIG reps, advisers; Firm is in final stages of negotiations with potential purchaser, broker-dealer CEO says.
April 6, 2009... Byline: Bruce Kelly After months of waiting for talks on the sale of the three broker-dealers that make up the AIG Advisor Group to be resolved, many of the more than 6,000 representatives and financial advisers in the network are growing...

Ex-Fidelity reps claim sales pressure; High-end brokers driven from firm by its push on in-house products.
April 6, 2009... Byline: Jed Horowitz Dozens of brokers serving Fidelity Brokerage Services LLC's most affluent clients left the firm last year, claiming they were handcuffed by a requirement that they obtain certified financial planner certification,...

Implementing "personal balance sheet' key to diversified retirement portfolio; Moshe Milevsky urges advisers to add human capital to the equation.
April 6, 2009... Byline: Mark Bruno Financial advisers need to begin re-evaluating traditional portfolio construction techniques, and they can start by measuring an individual's "human capital'' if they want to create truly diversified retirement...

PEOPLE.
April 6, 2009... Invescor Ltd. of Farmington Hills, Mich., has hired Yvette Latham, 43, as bidding manager for the firm's pricing and bidding unit. She will be responsible for managing life settlement offers received from Invescor's approved life settlement...

Pressure mounts to reform muni bond market; Industry plagued by lack of transparency, poor disclosure and problem derivatives, critics say.
April 6, 2009... Byline: Dan Jamieson Pressure is building for wholesale changes in the way that the municipal bond market is regulated. Muni issuers face huge losses from soured interest rate swaps, so the push is on to make some significant changes....

Goldman, Morgan likely suitors for First Republic; BofA eager to unload private bank even if it takes bath, experts say.
April 6, 2009... Byline: Charles Paikert Goldman Sachs & Co. Inc. and Morgan Stanley have emerged as the most likely suitors to snap up First Republic Bank, the private bank that Bank of America Corp. inherited from Merrill Lynch & Co. Inc. San...

Schwab's alternatives decision mobilizes State Street, Broadcort; Advisers haven't switched yet, but some say they like what they have seen.
April 6, 2009... Byline: Jed Horowitz Units of State Street Corp. and Bank of America Corp.'s Broadcort clearing division are working to capture alternative assets from registered investment advisers who are being forced to remove them from The Charles...

Elder-care planning rife with hurdles; Early preparation and, often, uneasy discussions are key, expert says.
April 6, 2009... Byline: Darla Mercado The road to elder-care planning continues to be plagued by stumbling blocks. The challenges include the significant planning work behind the recommendation of long term care insurance, family strife, conversations...

Value gurus Whitman, Eveillard are focused, bullish; Dramatic swings in equity market offer opportunities, they say.
April 6, 2009... Byline: Mark Bruno Although he may be coming off of his worst year ever, Martin Whitman one of the industry's most renowned and longest-tenured portfolio managers sees some major investment opportunities lurking in the market malaise....

Abuse by speculators keeps investors on the sidelines.
April 13, 2009... Investors' confidence in the stock and bond markets has been shaken, not just by economic weakness but also by the feeling that professional speculators are using tools not available to ordinary investors to plunder the markets. Individual...

Financial advisers seek ways to reward over-stressed assistants; With money tight, bonuses and raises are out, but flexible work schedules, heart-to-hearts are in.
April 13, 2009... Byline: Lisa Shidler Financial advisers exhausted from dealing with stressed-out clients now find themselves dealing with another stressed-out constituency: their assistants. With revenue down, rewarding hard-working assistants with...

OBAMA'S AGENDA DRIVES INTEREST AMONG INVESTORS; But many financial advisers aren't sold on the concept.
April 13, 2009... Byline: Sue Asci Driven by the Obama administration's commitment to climate change and environmental concerns, investors are continuing to express interest in green investing, even though financial advisers are cautious. Nearly half...

Fidelity eyes fees for its adviser referral program; Discount brokerage firm's efforts to link investors to outside advisers stumble amid downturn.
April 13, 2009... Byline: Jed Horowitz Fidelity Investments may lift the free ride it has been giving to registered investment advisers who participate in its client referral program. The Boston-based financial services giant is considering plans to...

FUNDS EXPECTED TO REBOUND WHEN INVESTORS STOP REELING; Assets in offerings seen as environmentally friendly grew 640% from 2001 to $1.1 billion last year.
April 13, 2009... Byline: David Hoffman The growth of mutual funds that invest in stocks perceived as friendly to the environment came to a halt last year as investors scrambled for safety, but industry experts think that once investors regain their...

Beleaguered insurers await their white knight - TARP; But some wonder whether bailout money would be too little, too late.
April 13, 2009... Byline: Darla Mercado Although life insurers may be able to get a federal lifeline through the Troubled Asset Relief Program, it remains to be seen whether the money would be enough to help carriers survive mounting losses and decreased...

Timers take big leap into the stock market.
April 13, 2009... Byline: Dan Jamieson Market timers are jumping in. Financial advisers who are members of the National Association of Active Investment Managers Inc. of Littleton, Colo., made a record leap into the stock market late last month. ...

Tough times lead to modifications to alimony and child support; Financial advisers urge clients to cut back, remain flexible.
April 13, 2009... Byline: Lisa Shidler More people are attempting to lower their child support and alimony payments amid increasing job losses and a dismal economy, according to a new survey. A March survey of 1,600 members of the American Academy of...

Family feud drives home need for succession plans; RJ affiliate roiled by father-son dispute.
April 13, 2009... Byline: Bruce Kelly When Chris Wanken's dad, a branch manager affiliated with Raymond James Financial Services Inc., fired him last March, it ignited a smoldering family dispute that experts say might have been avoided with better...

ADVISERS MIXED ABOUT ACTIVIST PROXY RESOLUTIONS; SEC restrictions limit shareholder access, though Schapiro signals potential change.
April 13, 2009... Byline: Sara Hansard Advisers are divided over whether rules should be expanded to give environmental investment groups access to company proxy ballots. Environmental groups and investor activists have met with Securities and Exchange...

CASHING IN ON GREEN INVESTING; Water, wind, solar offer opportunities for investors.
April 13, 2009... Byline: Jeff Benjamin For those determined to put their money where their passions are, the world of environmentally conscious investing offers a growing list of opportunities. The challenge, assuming that those same passionate...

Lawmaker: Independent advice may bolster 401(k) plans; Despite massive losses, the system isn't broken, says Rep. Andrews.
April 13, 2009... Byline: Mark Bruno Roughly $2 trillion in assets have been sucked out of 401(k) plans in the last year, prompting scores of individual investors to lose faith in what's become the primary retirement vehicle for millions of Americans. ...

Market's rally breeds skepticism among advisers; Some are carefully re-balancing portfolios, reviewing strategies.
April 13, 2009... Byline: Darla Mercado Financial advisers are viewing the market gains of the past month with skepticism as they weigh whether it is time to dip a toe back into equities. Between March 9 and last Wednesday, all three major stock indexes...

OppenheimerFunds bolsters investment, risk operations; Firm hit by class actions, probes by states into losses in bond funds backed by commercial mortgages.
April 13, 2009... Byline: David Hoffman Amid a spate of class actions and investigations by five states into losses associated with its bond funds, OppenheimerFunds Inc. has launched an aggressive effort to strengthen its business operations. It is too...

Smaller banks positioned to build wealth management business; Opportunity knocks as their larger competitors stumble.
April 13, 2009... Byline: Charles Paikert Community and regional banks are scrambling to take advantage of the perceived misfortunes of larger competitors to expand their wealth management businesses. "This is the greatest opportunity we may ever have...

Web-based tactics publicly embarrass tax cheats.
April 13, 2009... Byline: Jim Pavia Tax day is Wednesday, and once again the Internal Revenue Service won't collect billions of dollars owed by taxpayers. The gross tax gap the difference between what taxpayers should pay and what they actually pony up on...

SEC's move toward curbing short selling sparks debate; Questions arise about whether uptick rule could have stemmed market plunge.
April 13, 2009... Byline: Jeff Benjamin The Securities and Exchange Commission's decision last week to take a closer look at restricting short selling was greeted with mixed reviews from financial advisers and money managers. "I'm 100% behind it,'' said...

Feds wag finger at target date funds amid losses; Labor, SEC probes may lead to new regs.
April 13, 2009... Byline: Mark Bruno Target date funds are coming under heavy scrutiny on Capitol Hill, with lawmakers and regulators working hand in hand to determine if these one-stop-shop retirement funds are in need of increased oversight or perhaps...

At the Bell.
April 13, 2009... Execs pessimistic about recovery In a survey of 530 chief financial officers and senior comptrollers by Chicago-based Grant Thornton LLP, just 23% said that they thought the economy would improve in six months, while 77% said that the...

People.
April 13, 2009... Cleary Gottlieb Steen & Hamilton LLP, an international law firm in New York, has rehired Edward Greene, 67, an attorney who will focus on securities, corporate governance, regulatory, financial services reform and other corporate-law matters....

Funds' carbon footprint.
April 13, 2009... Byline: David Hoffman They don't produce much in the way of greenhouse gases themselves, but mutual funds and exchange traded funds can leave an indirect carbon footprint. Trucost PLC, a London-based environmental-research...

Wachovia stops offering profit-formula deals; Firm also incorporates brokers' trailing three-months' production into recruitment packages.
April 13, 2009... Byline: Dan Jamieson Wachovia Securities last month stopped offering recruitment packages to potential recruits to its profit-formula platform. Profit-formula representatives are employee brokers who work in branch offices of Wachovia...

Fund industry likely to face wave of suits over risk disclosure; Economic downturn may spur more investors to seek legal remedies for their losses.
April 13, 2009... Byline: David Hoffman The dismal performance of mutual funds could result in a wave of lawsuits alleging that funds failed to disclose the true risk of their investments, according to several industry lawyers. Class actions that hinge...

Tax cheats get creative.
April 13, 2009... Byline: Jeff Benjamin As the Obama administration scrambles to tighten tax loopholes, the strategies for dodging income taxes continue to evolve. A recent report from Bankrate Inc. in North Palm Beach, Fla., uncovered such creative...

Advisers to get a peek at their peers; Six firms to be hosts in planning group's Be Our Guest event.
April 13, 2009... Byline: Charles Paikert The Foundation for Financial Planning's annual Be Our Guest program kicks off next month when six of the nation's top financial planners open their firms' doors to colleagues from around the country. The...

When it comes to layoffs, small RIAs feel worst pain; Financial advisers grapple with cutting loose employees who are like family members.
April 13, 2009... Byline: Lisa Shidler For months, large financial services companies have been laying off people by the hundreds but it is a different story for smaller advisory firms that must say goodbye to employees who have become like family members....

Upcoming Events.(Calendar)
April 13, 2009... April 27, 29, May 1 Going Independent Workshop Series Find out if becoming an RIA is right for you. Learn what you need to know about going independent, including the good, the bad and the truth, the economics, and compliance and legal...

Arbitrations cost Morgan Keegan big; Bond fund plunge riles retail investors, including Tim McCarver.
April 13, 2009... Byline: Bruce Kelly Investors who are battling Morgan Keegan over the blowup of its bond funds are on a hot streak, with a former Major League Baseball all-star among the recent arbitration winners. Investors have scored five...

Making a CRM platform your hub; Customer relationship management software can be a comprehensive tool - if advisers use it effectively.
April 20, 2009... Byline: Davis D. Janowski Selecting a customer relationship management system is likely to be one of the most important technology purchases an adviser will make and one with which the practice probably will live for years to come. ...

Spike in financial stocks stirs hopes for big banks; But too many unknowns make the sector a dicey bet for investors.
April 20, 2009... Byline: Sue Asci Financial stocks have made a remarkable comeback in the past month, leaving advisers to make a hard call: Are banks regaining their health after the yearlong shellacking that they have endured? Financial-sector mutual...

Risky business? Advisers have doubts about insurers that lost TARP eligibility.
April 20, 2009... Byline: Darla Mercado Insurance companies that have been eliminated from the TARP pool are running up against a new obstacle: financial advisers who are reconsidering whether they want to do business with them. "We have all but stopped...

In the financial dark.
April 20, 2009... Byline: Jamie Burns April is National Financial Literacy Month, and it couldn't arrive at a better time for Americans who can't answer the most basic questions concerning personal finance. A recent national survey completed by the...

States pushing for authority over Reg D offerings; SEC's approach might be an open invitation to fraudsters, some say.
April 20, 2009... Byline: Dan Jamieson State securities regulators are asking Congress for expanded powers to review offerings of private securities. They say these offerings, which are exempt from Securities and Exchange Commission registration under a...

Upcoming Events.(Calendar)
April 20, 2009... April 27, 29, May 1 Going Independent Workshop Series Find out if becoming an RIA is right for you. Learn what you need to know about going independent, including the good, the bad and the truth, the economics, and compliance and legal...

Confusion heightened at AIG Advisor Group; Layoffs, consolidation cloud future of broker-dealer network.
April 20, 2009... Byline: Bruce Kelly Last week's layoffs and consolidation of key areas of operation at the three broker-dealers of the AIG Advisor Group only add to the confusion and uncertainty surrounding the network's future and the fate of its more...

Advisers take wait-and-see attitude toward insurers; Recent sector rally doesn't translate into long-term optimism.
April 20, 2009... Byline: Darla Mercado Insurance stocks have outperformed the overall market during the past four weeks, but financial advisers are reluctant to jump in. New York-based Keefe Bruyette & Woods Inc.'s KBW Insurance Index (KIX) gained...

People.
April 20, 2009... Bancnorth Investment Group Inc. of Portland, Maine, has hired Christopher Olszewski, 40, as an investment representative based in the Westmont, N.J., branch of Cherry Hill, N.J.-based TD Bank NA. He will provide comprehensive retirement and...

Schwab hit by slowing adviser assets; Data suggests that explansion of the RIA industry may have reached a plateau.
April 20, 2009... Byline: Jed Horowitz The Charles Schwab Corp. reported better-than-expected first-quarter earnings last week, but buried in the numbers were signs that the headlong growth of the independent-adviser community may be waning, according to...

Convertible bonds are enjoying a good run; After underperforming equities last year, they bounce back.
April 20, 2009... Byline: David Hoffman After getting beaten to a pulp last year, convertible bonds are making a comeback. The convertible-bond-fund category as tracked by Morningstar Inc. of Chicago was up 7.66% year-to-date as of last Monday, making...

A good time to go paperless? Cash-strapped advisers find that vendors are willing to negotiate on price.
April 20, 2009... Byline: Lisa Shidler Five years ago, Sheila M. Chesney was debating the value of converting to a paperless operating environment. The cost of was steep, but Ms. Chesney, principal of Chesney & Co. in Sheldon, S.C., decided to go ahead. ...

Schwab webcast to address its revised alternatives plan; Advisers still confused about how the custodian intends to proceed.
April 20, 2009... Byline: Jed Horowitz The Charles Schwab Corp. has scheduled a webcast Thursday to brief registered investment advisers on its revised plans to wind down custody of alternative investments. The largest custodian of RIA assets set off a...

Class C shares set to go the way of the dodo; Popularity of no-load funds, shift to fees have changed the game.
April 20, 2009... Byline: David Hoffman The mutual fund industry is poised to do away with Class C mutual fund shares, even though the Securities and Exchange Commission gave them a reprieve by moving to table reforms. "There's no question that's going...

UBS to overhaul its retail business; 500-plus advisers will be cut by year's end; branch consolidation plans in the works.
April 20, 2009... Byline: Mark Bruno As part of a massive overhaul of its U.S. wealth management business, UBS AG is set to shed up to 2,000 jobs, shrink its regional operations and consolidate a number of branches here over the next several months. ...

Lessons from students.
April 20, 2009... Byline: Jamie Burns College may be a great place to learn about the investment business, but professionals could learn a thing or two from a group of 20 students at Houston's Rice University. Founded last fall, Rice's student-run...

Advisers are wary of the federal toxic-debt program; Treasury's PPIP has kinks in investments, policy, they contend.
April 20, 2009... Byline: Sara Hansard The government's Public-Private Investment Program designed to remove bad assets from bank balance sheets and promote lending will help turn around the economy in the short run, but perhaps not long-term, according...

At the Bell.
April 20, 2009... Three ING B-Ds may be put on block Three broker-dealers in the ING Advisors Network face another round of strategic reviews that could lead to their sale, an ING spokesman said Friday. This comes as ING Group NV of Amsterdam,...

Two new CRM systems increase firms' efficiency; Systems automate processes, generate client reports.
April 20, 2009... Byline: Davis D. Janowski Two new customer relationship management systems could help advisory firms save time and reduce overhead. The simpler, less expensive platform is ClientVision, a CRM system that is integrated with Microsoft...

An invitation to rant.
April 20, 2009... Byline: Sue Asci In an effort to attract new Generation Y customers, a credit union has launched an unusual campaign encouraging people to voice their concerns about financial institutions on video. As part of the Matter campaign,...

How small advisory firms can look big; Web-based communications technology levels the playing field.
April 20, 2009... Byline: Evan Cooper Many small advisory firms are operating leanly these days, especially in manpower, but thanks to technology, they can appear equal to their larger peers. By offering the same products and services as wirehouses,...

Ex-major league star Mo Vaughn and adviser in beanball battle; Ballplayer charges theft, planner claims intimidation.
April 20, 2009... Byline: Mark Bruno A financial adviser to former Major League baseball player Mo Vaughn is claiming that he threatened and intimidated her after she tried to rein in his "insane spending habits.'' It is the latest development in a case...

In the prime of their lives, young investors fear future; People in their career-building years face more financial stresses than their elders, poll finds.
April 20, 2009... Byline: Lisa Shidler "Thirtysomething'' adults are stressed about their finances and worried about how to pay down debt, while saving for retirement and their children's college education. According to an online poll conducted in...

Emerging markets attracting interest; Survey: Private-equity investors expect to move into funds for first time.
April 20, 2009... Byline: Arleen Jacobius A little more than one-third of private-equity investors without exposure to emerging-markets funds plan to invest in such funds within the next two years, according to a new survey conducted by Coller Capital and...

Advisers find Fidelity score card promotional; Intended to help planners assess their practices, evaluator is just a "prospecting tool,' they say.
April 20, 2009... Byline: Davis D. Janowski Fidelity Investments has unveiled a free web-based score card for advisers that many early users have found wanting. The Technology Benchmark Evaluator, which enables advisers to compare their use of...

Dreaming the adviser software integration dream; Seamlessness and compatibility are the goals, but we're not quite there yet.
April 20, 2009... Byline: Davis D. Janowski When it comes to the thorny issue of integration, software companies serving the adviser market are making progress. Still, after almost two decades, a state of "data nirvana'' remains elusive, said Greg...

Let's focus on dangers of the future, Mr. Bernanke.
April 20, 2009... Federal Reserve Board Chairman Ben Bernanke and his Fed colleagues must begin to address investors' concerns about inflation in more concrete terms than he did in his speech at Morehouse College in Atlanta last week. In his speech, he...

For advisers, technology is not an elective.
April 20, 2009... Byline: Jim Pavia Many financial advisers are falling short in their knowledge and use of technology. That was the observation of two veteran advisers who attended the pre-conference technology session of the recent InvestmentNews...

Financial markets face a lost generation of investors; Collateral damage from economic crisis has long-term impact.
April 20, 2009... Byline: Dan Jamieson Just as the Great Depression scared an entire generation away from the stock market, recent events may drive today's investors to the sidelines forever. The economic downturn, plummeting real estate values,...

THE INDIE CHANNEL'S FUTURE; Yes, times are tough, but the business has a tradition of rebounding.
April 27, 2009... Byline: Bruce Kelly Considering the economy, the state of the stock market and the public's perception of Wall Street, the immediate outlook for the independent-brokerage business like most financial services businesses is anything but...

New Build America Bonds are the hot muni investment; With states and municipalities hungry for help, sales on issues featuring a 35% federal rebate close in on $10B.
April 27, 2009... Byline: Jeff Benjamin A little more than a week after they were first issued, sales of Build America Bonds have reached nearly $10 billion and are climbing. Some estimates anticipate that sales of the federally subsidized taxable municipal...

At the Bell.
April 27, 2009... Law strengthens rescue plan oversight President Obama Friday signed into law a bill aimed at strengthening oversight of the $787 billion financial-rescue plan. The law gives special inspector general Neil Barofsky the ability to...

Market participants struggle with P/E distortions; Measures that average out earnings over years are gaining favor.
April 27, 2009... Byline: Dan Jamieson Market watchers are in a tizzy trying to figure out if U.S. equities are overvalued, fairly priced or the buy of a lifetime. Stock market multiples that use trailing 12-month reported earnings for the Standard &...

Advisers create exit plans for underwater VAs; But strategy to bail can backfire unless every detail is analyzed.
April 27, 2009... Byline: Darla Mercado The term "bailout'' has taken on new meaning for financial advisers as they devise ways to free clients from underperforming variable annuities, but the path to freedom is paved with possible tax complications and...

Shorting ban falls short.
April 27, 2009... Byline: Sara Hansard Banning short sales not only doesn't calm markets, it makes them choppier, a new study has found. According to Abraham Lioui, a finance professor at EDHEC Business School in Lille, France, market volatility rose...