Investment News articles from August 2003

Investment News archives from August 2003

'Industry Attitudes' survey on the way.(News)
August 4, 2003... We want to know what you, as financial advisers, think about the investment profession. For the third straight year, InvestmentNews will be conducting its survey of financial advisers. We will be sending out a questionnaire within the next...

Adviser performance matters more than service, study says; Industry observers not totally convinced.(News)
August 4, 2003... Byline: Brooke Southall Advisers are out of touch with what affluent clients want, according to a report by Fidelity Investments in Boston. Clients value performance first and service second, the study indicates. "The research may...

Reverse Spin - Take your pick: Jobless down, jobs too.(Briefs)
August 4, 2003... Byline: Frederick P. Gabriel Jr. Explain this little paradox: Unemployment is down, but worries climb. The U.S. jobless rate fell to 6.2% in July, from 6.4% the month before, the Department of Labor said in a report issued Friday. The...

Some money managers aren't convinced rebound is for real; Recovery, or just another bear market rally?(News)
August 4, 2003... Byline: Bruce Kelly The rally in stocks has allayed - if only slightly - the fears of some money managers. At market close last Monday, the Standard & Poor's 500 stock index was up 13.3% year-to-date. Such a bump is welcome after...

Shakeout creating opportunity for major players; Clients demand more, from fewer firms.(Clearing)
August 4, 2003... Byline: Bruce Kelly Broker-dealers are experiencing a behind-the-scenes sea change. The clearing industry, the underpinning to brokers and financial advisers selling investments, has been rapidly evolving. Broker-dealers, or...

Monday Morning: Rally might be all smoke and mirrors.(News)
August 4, 2003... Byline: Frederick P. Gabriel Jr. I don't know about anyone else, but I started craving a cigarette right after I opened my second-quarter portfolio statement - and I don't even smoke. In case you missed it, the Standard & Poor's 500...

Insurance agents likely to face an annuities hurdle; Model state rules target sales to elderly.(News)
August 4, 2003... Byline: Sara Hansard Insurance agents are likely to face their first suitability requirements at the state level. A committee of the National Association of Insurance Commissioners approved a model regulation July 21 (by a 6-1 vote)...

One on One: "We think the Internet is still a place that has lots of upside potential".(News)
August 4, 2003... Byline: Rick Miller It may sound so late '90s, but G. Randy Hecht still believes in the investment potential of the Internet. His boutique firm, RS Investments in San Francisco, is known for investing in small- to mid-cap companies,...

Street Wise: Muni funds are looking good now, but watch out.(The Markets)
August 4, 2003... Byline: Jeff Benjamin A case may be made for turning to municipal bond funds as a means of tempering portfolio volatility, but caution is advised. Take, for example, the Guardian Tax Exempt Fund (GUTEX), managed since inception 10...

At the Bell.(Late News)
August 4, 2003... Smith Barney unit adds managers * Smith Barney Inc.'s Consulting Group in Wilmington, Del., has added Camden Asset Management LP of Los Angeles and Freeman Associates Investment Management LLC in Rancho Santa Fe, Calif., to the list of...

Battle lines drawn over use of CFP mark; An insurance analyst describes her ordeal.(News)
August 4, 2003... Byline: Sara Hansard The certified financial planner credential has come to be one of the most-sought-after designations for advisers. But using it can also be a hassle. That's what insurance analyst Genet "J.J.'' MacNab has...

Questions abound over how much more is appropriate; Disclosure sought on environmental issues.(News)
August 4, 2003... Byline: Sara Hansard Social activists are demanding that publicly held corporations provide more disclosure about the environmental and social risks associated with their business activities. And they're enlisting the aid of members of...

Tax Watch: IRS shutting down yet another tax shelter.(News)
August 4, 2003... Byline: Mark Battersby In an effort to shut down a new tax shelter, the Internal Revenue Service is informing investors that they will not be able to use so-called common-trust funds to reduce their tax bills. The IRS has served notice...

Zephyr product flies in face of conventional wisdom; Software tool said to measure investing skills.(News)
August 4, 2003... Byline: David Hoffman The belief that past performance is no guarantee of future results is rarely questioned. But Steve Hardy, president of Zephyr Associates Inc., a Zephyr Cove, Nev.-based firm that develops analytical-software tools...

Big corporate plans spice menu, but few participants are biting; Most electing to stick with company stock.(News)
August 4, 2003... Byline: Sara Hansard Large companies are making it easier for employees to diversify out of company stock in pension plans, but few employees appear to be taking advantage of that option. A survey of 57 companies that have some of the...

Taking Sides: Is the SEC crying wolf?(Opinion)
August 4, 2003... The Securities and Exchange Commission has announced that it won't be able to spend $103 million of its record $716 million budget this fiscal year. Officials claim they didn't have enough time to hire the hundreds of accountants,...

Investment advice is a questionable need.(Opinion)
August 4, 2003... Investors with at least $100,000 to invest - theoretically the prime targets of financial planners and investment advisers - still don't have a lot of confidence in the advice such experts give, a survey by Bank of America Corp. suggests. ...

Brokers, if put on spot, could pressure firms; House bill would force them to reveal fund bonus to clients.(News)
August 4, 2003... Byline: Sara Hansard Brokerage firms will likely feel "bottom-up'' pressure from their own sales forces to change their mutual fund sales practices if legislation pending in the House is enacted. That may be welcome news to many...

The word in Washington: Passage of law is just a start.(News)
August 4, 2003... Byline: Sara Hansard Washington officials who oversee the financial services industry last week lauded the passage of the Sarbanes-Oxley Act of 2002 as a key ingredient in restoring investor confidence. But they noted that more needs to be...

AIMR, MMI open dialogue on performance standards; Groundwork is laid for a separates peace.(News)
August 4, 2003... Byline: Jeff Benjamin The Association for Investment Management and Research and the managed-accounts industry appear to be on their way toward revising the AIMR's recent investment-performance-reporting guidelines. Representatives...

Flows giving funds a glow; Fourth $100 billion quarter ever gives industry cause for hope.(News)
August 4, 2003... Byline: David Hoffman Things appear to be improving for the mutual fund industry. Fund flow data for the second quarter indicate that the industry saw strong inflows in stock and hybrid funds - a result of improved equity returns,...

Despite fanfare, advisers' reviews are lukewarm; Sarbanes-Oxley Act still needs a lot of work.(News)
August 4, 2003... Byline: Frederick P. Gabriel Jr. For all the hoopla surrounding the one-year anniversary of the Sarbanes-Oxley Act of 2002, the reforms put in motion by the sweeping law are getting mostly tepid reviews from financial advisers and industry...

Short Interests: For one Big Apple hit from '69, worm hasn't turned.(News)
August 4, 2003... Byline: David Hoffman, Brooke Southall and Jeff Benjamin Life was good for New York sports fans in 1969. The Jets won football's Super Bowl, the Mets won baseball's World Series and the Knicks began a basketball season that would...

Says advisers should provide specific advice on real estate investments; Take a harder look at hard assets, study urges.(News)
August 4, 2003... Byline: Brooke Southall If there's one task advisers are supposed to get right, it's allocating their clients' assets. The composition of people's net worth has been increasingly skewed toward real estate in the past few years, and...

More financial advisers are paying for (air)play; Rushing to radio to win new clients.(News)
August 11, 2003... Byline: Dale Buss Carol Buchman, a certified public accountant and certified financial planner in Manhattan, hankered for something more. So she recently became co-host of a regional radio show about financial planning. Ms. Buchman...

Street Wise: Proprietary protein powers shares of biotech firm.(The Markets)
August 11, 2003... Byline: Jeff Benjamin Understanding exactly what GTC Biotherapeutics Inc. (GTCB) does requires almost as much determination and patience as investing in this Framingham, Mass.-based biotech operation. However, 10 years after it was...

At the Bell.(Late News)
August 11, 2003... Vanguard replaces one fund adviser * The Vanguard Group Inc. in Malvern, Pa., said Friday it had dropped Newell Associates in Palo Alto, Calif., as one of three advisers for its $2.5 billion Vanguard Equity Income Fund. Newell was the...

Tax Watch: Tax Court strikes at family limited partnerships.(News)
August 11, 2003... Byline: Mark Battersby There is little doubt that a May ruling by the U.S. Tax Court will require estate planners to change the manner in which they use family limited partnerships. However, some attorneys have questioned whether that...

Fed action may set off unforeseen reaction.(Opinion)
August 11, 2003... The Federal Reserve's steering wheel is only loosely connected to the front wheels of the economy. That's the timely reminder provided by the bond market's reaction to the Fed's latest quarter-point interest rate cut. Since the cut in the...

Fast Track: Designations a hit at American College.(News)
August 11, 2003... Byline: David Hoffman Financial planning credentials equal big business. The website of the Certified Financial Planner Board of Standards Inc. in Denver lists 22 major financial services designations that can be obtained from various...

Monday Morning: Helping prepare for death and taxes.(News)
August 11, 2003... Byline: Jim Pavia As the old saying goes, there are only two things you can be sure of in life: death and taxes. I'm quite confident that as a financial adviser, you have discussed with your clients their tax situations in some detail....

Moving Up.(News)
August 11, 2003... * The Private Bank at Bank of America Corp. in Charlotte, N.C., has named Timothy P. Schieffelin, 48, senior vice president. He will be responsible for providing customized asset management, credit, and financial solutions and services to...

Adds adviser shares; Vanguard ready to join the race; Fidelity starts riding life-cycle funds harder.(News)
August 11, 2003... Byline: Brooke Southall Fidelity Investments is ready to sell more mutual funds through brokers, but with itself as the primary purveyor of advice. The Boston-based financial services giant on July 31 launched adviser share classes on...

Assets have shrunk, but client base and variety of services have grown; For the average adviser, less is more.(News)
August 11, 2003... Byline: Jeff Benjamin Financial advisers are poised to emerge stronger than ever as the market and economy officially turn the corner toward recovery. According to a new study looking at the financial advice business during the past...

SEC to take long look at short-selling; May lift restrictions on use of hedging by mutual funds.(News)
August 11, 2003... Byline: Frederick P. Gabriel Jr. The Securities and Exchange Commission is pressing ahead with an investigation into whether mutual funds should be given freedom to make greater use of investment strategies such as short-selling. But...

ICI: Hold bond raters liable; But industry group's motive is self-interest, critic suggests.(News)
August 11, 2003... Byline: David Hoffman The mutual fund industry wants bond raters to be legally liable. In response to a June 4 request for comment by the Securities and Exchange Commission, which is looking into the issue, the Investment Company...

Reverse Spin: More fund disclosure in the works.(Briefs)
August 11, 2003... Byline: Frederick P. Gabriel Jr. It won't be long before brokers are expected to disclose whether they wear boxers or briefs. NASD on Thursday proposed rules that would require brokers to report so-called revenue sharing deals, under...

Taking Sides: Letting funds hedge their bets can be a winner for investors.(Opinion)
August 11, 2003... As reporter Frederick P. Gabriel Jr. writes elsewhere in this issue, the Securities and Exchange Commission is considering rule changes that would allow mutual funds to take some actions to hedge their portfolios. A modification such as...

Trying to drive the FPA to tiers; Classify advisers by level of advice, investment counseling guru urges.(News)
August 11, 2003... Byline: Brooke Southall The Financial Planning Association should group advisers into two distinct categories - fiduciaries and non-fiduciaries - insists a leader in the investment counseling field. Donald B. Trone, director of the...

Advisers cashing in on Schwab program; See major asset infusion from branch referrals.(News)
August 11, 2003... Byline: Brooke Southall Charles Schwab & Co. Inc. delivered billions in new assets to the 330 advisers in its referral program during the second quarter. And the cash infusion is changing the way these advisers view the San Francisco...

Short Interests: Why targeted bond funds are way off the mark.(News)
August 11, 2003... Byline: David Hoffman, Sara Hansard and Jeff Benjamin Want proof that investors believe interest rates have nowhere to go but up? Look at the American Century Target Funds - bond funds that mature at a specific date - offered by...

One on One: "It is to our own political interest to ensure the market function is fair and transparent".(News)
August 11, 2003... Byline: Sara Hansard Richard Baker, R-La., chairman of the House Financial Services subcommittee on capital markets, is a man in waiting, but he's not sitting still while he waits. If Republicans continue to control the House, Mr....

Fundamentals aren't in place for a strong economic recovery, some experts note; Some managers shaken by slump in bond prices.(News)
August 11, 2003... Byline: Phyllis Feinberg The recent sharp rise in interest rates is catching some bond managers by surprise. The fixed-income managers at JPMorgan Fleming Asset Management in New York, for one, weren't expecting what happened in June...

Investors' behavior can be sooo predictable; Buying on a rumor, selling on the news.(News)
August 11, 2003... Byline: David R. Evanson If you give some gamblers cards and allow others to pick their own, do they value them differently? You bet. Not only are the gamblers who picked their cards twice as likely not to sell, but those who would sell...

Your client's strategy might be all wet; Short memories contribute to a general lack of preparedness - investors need your help.(Opinion)
August 11, 2003... Byline: Stephen Gresham My New York friends have a lot of umbrellas - probably more umbrellas than those owned by people in any city I know. New Yorkers have so many umbrellas because they bought them from umbrella vendors who appear like...

Advisers' complaints probably won't sway Treasury; Laundering stance probably won't wash.(News)
August 11, 2003... Byline: Sara Hansard The argument that investment advisers can't police their clients for money laundering, because the advisers usually don't have custody of assets, appears to have been in vain. The result is that advisers will have...

Short Interests: A two-termer takes on The Terminator.(News)
August 11, 2003... Byline: Frank Kelly John Garamendi is accustomed to wrestling success - against two-legged opponents as a collegian or four-legged ones as a cattle rancher - but California's insurance commissioner will soon be grappling with a...

Street Wise: Aquila's feeling that Rocky Mountain high.(The Markets)
August 18, 2003... Byline: Jeff Benjamin Nine years ago, when Aquila Management Corp., a New York municipal bond funds shop, launched a mutual fund that invests specifically in the stock of companies based in the Rocky Mountain region in Colorado, it might...

Tax Watch: Younger Americans face increasing taxes.(News)
August 18, 2003... Byline: Mark Battersby A report recently released by the General Accounting Office says younger Americans will face tax increases, cuts in government programs and reduced retirement benefits. The sooner Congress acts, the less the pain...

Reverse Spin: Blackout to make consumers see red.(Briefs)
August 18, 2003... Byline: Rick Miller The blackout of 2003 isn't expected to short-circuit the economic recovery, but some 29 hours without juice took its toll. Factoring in everything from spoiled food to lost retail dollars, one economic consulting...

Blackout can't faze these ready advisers; Many planned well for emergency situations.(News)
August 18, 2003... Byline: David Hoffman and Bruce Kelly The brevity of last week's blackout left financial planning firms and their clients relatively unscathed. Firms contacted by InvestmentNews reported they were up and running again by midday Friday,...

LPL advisers venture into debt management; Can now offer loans, consolidate debts.(News)
August 18, 2003... Byline: Brooke Southall Linsco/Private Ledger Corp. is putting its financial advisers into the debt management business. The broker-dealer, which is based in Boston and San Diego, will be making available to its 4,700 subcontracted...

Annuities' pick-me-up.(News)
August 18, 2003... Byline: Rick Miller The General Accounting Office is recommending a federal pension law amendment that could be a boon to the annuities industry. In a report issued last month, the GAO suggested that Congress consider amending the...

Taking Sides: Fee disclosure plan is good; add-on might make it better.(Opinion)
August 18, 2003... Brokerage firms that sell mutual funds should tell customers when the firm or a broker has financial incentives to sell one fund over another. NASD recently announced that proposal, which may eventually become a new industry rule. It would...

Vanguard to woo new clients with sector funds; Targets advisers, institutional investors.(News)
August 18, 2003... Byline: David Hoffman The Vanguard Group Inc. in Malvern, Pa., is evolving. Last month, the nation's second-largest mutual fund firm announced that it was launching 20 new exchange-traded funds and 10 new sector-specific index funds in...

As 401(k) management market shrinks, opportunities for advisers are growing; Participants showing more interest in advice.(Tending The Nest Eggs)
August 18, 2003... Byline: Sara Hansard The 401(k) market is pausing to catch its breath. And brokers and investment advisers that specialize in retirement plans are poised to pick up market share from the dwindling number of plan management companies. ...

At Issue: The ABCs (and D's, etc.) of do-it-yourself investing.(Letters)
August 18, 2003... While it is true that investment advisers need to "work harder to justify their existence'' [Taking Sides, Aug. 4], that advice would apply to everyone providing a product or service. For example, most mutual funds do not achieve the rate...

Bond dilemma: Is market signaling a buy or a sell? Bear market lurks around the corner, some speculate.(News)
August 18, 2003... Byline: Brooke Southall Financial advisers are back on the horns of a dilemma after a rare period when both stock and bond prices advanced. Since June 16, bond prices have nose-dived. But whether this represents a buying opportunity or...

At the Bell.(Late News)
August 18, 2003... Wachovia adding solo 401(k) plans Wachovia Retirement Services is planning to jump into the market for sole-proprietor 401(k) plans with its new Evergreen One Plan, which is scheduled for a fourth-quarter launch. "We're pretty bullish...

Short Interests: Planning firms hiring, paying more; bonuses down.(News)
August 18, 2003... Byline: Rick Miller, Brooke Southall and Frank Kelly Despite a bad economy and rising unemployment, financial advisory firms are still hiring. Financial planning firms increased full-time staff by 15% in the last two years, according...

Datebook.(Calendar/Datebook)
August 18, 2003... SEPTEMBER 4 - CDO Analytics Symposium, Financial Research Associates LLC. Park Central New York. (800)280-8440 or frallc.com. 8-9 - Fall Forum 2003, Financial Planning Association of New Jersey. Hilton East Brunswick. (877)773-7265 or...

Fast Track: OppenheimerFunds exec eyes long term.(News)
August 18, 2003... Byline: Rick Miller In his new role as chief investment officer of OppenheimerFunds Inc. in New York, Kurt Wolfgruber has been traveling the adviser circuit, preaching a consistent message: get clients to focus on the long term. After...

One-stop financial literacy shop on the radar; New bill targets a coordinated federal policy on literacy programs.(News)
August 18, 2003... Byline: Sara Hansard Financial literacy is getting more attention at the federal level. In late July, Sen. Michael Enzi, R-Wyo., chairman of the Senate Banking Committee's securities and investment subcommittee, and a fellow committee...

Moving Up.(News)
August 18, 2003... * PRS Group International Investment Advisory Services Inc. in Miami has hired Edward den Dooven, 31, as director of marketing for the United States. Mr. den Dooven's primary focus will be on expanding PRS Group's current fund of hedge funds...

Bottom-fishing distressed funds are tasty bait; Hedge strategy hot as the market in corporate bonds at or near default has tripled.(News)
August 18, 2003... Byline: Jeff Benjamin In the world of hedge fund investing, the debt of the most down-and-out companies is shaping up to be among the biggest opportunities, which may be a positive sign for the overall economy. The distressed-debt...

Fork in the road for funds of emerging-market debt; But category's still expected to post respectable returns.(News)
August 18, 2003... Byline: David Hoffman Emerging-market-bond funds are still the top-performing bond fund category, but some experts worry that some rough days may lie ahead. Investors looking to the category as a way to juice lagging fixed-income...

A middling-rich niche; Advisers, regional banks eye `castoff' wealthy.(News)
August 18, 2003... Byline: Rick Miller As major banks chase the superrich, some of their less wealthy clients may be getting shuttled aside. That's increasingly presenting an opportunity for financial advisers willing to fill the gap. "We don't believe...

Market for such rankings is undefined; Corporate rater: Emerging breed.(News)
August 18, 2003... Byline: Bruce Kelly Analysts promising candid ratings of companies' governance practices are still trying to push their way to the forefront. In the wake of scandals at companies ranging from Enron Corp. to Freddie Mac, executives at...

Monday Morning: Advising can be an uphill battle.(News)
August 18, 2003... Byline: Mike Clowes Most mass-affluent investors think of themselves as moderately to extremely conservative in their investments, according to a recent survey by Bank of America Corp. of Charlotte, N.C. More than 70% of the...

One on One: "Macros can come into play, but we as portfolio managers have our own views".(News)
August 18, 2003... Byline: Brooke Southall David Gilmore, 32, is one of the youngest portfolio managers at Federated Investors Inc. Three years ago, Mr. Gilmore was put in charge of the Federated Capital Appreciation Fund, and he has been flying high...

Profiling Top 25 401(k) managers.(Tending The Nest Eggs)
August 18, 2003... 1 Fidelity Investments 82 Devonshire St., Boston, MA 02109; phone: (800) 343-3548; fidelity.com (millions) Corporate 401(k) $228,947 Total DC assets $282,211 Internally managed DC $270,382 Investment vehicle:...

FCC's no-fax rule draws ire of trade groups; Provision is called an unnecessary obstacle.(News)
August 25, 2003... Byline: Sara Hansard A little-noticed provision in the Federal Communications Commission's "do not call'' regulations will stop businesses from faxing sales materials to existing customers unless they get prior approval. Several...

Hiring picking up on Wall Street, but advisers never slowed down; Number of planners at surveyed firms rose 42% in bear market.(News)
August 25, 2003... Byline: Rick Miller The tide now may be turning in Wall Street's employment picture, but financial adviser firms have been adding staff all along. During the bear market, such firms not only increased their staff but total compensation...

Street Wise - Fruitful and multiplying: Catholic-values funds.(The Markets)
August 25, 2003... Byline: Jeff Benjamin George Schwartz has become a believer in the power of the moral high ground, and he isn't ashamed to admit it. While it took some convincing to get Mr. Schwartz to launch a mutual fund designed specifically around...

Parochialism could deep-six 529 plans; "Flexibility and choice may soon go the way of the dinosaur as cash-starved states search for new sources of revenue.''.(Opinion)
August 25, 2003... Byline: Lynn Jenkins Section 529 college savings plans provide for an easy, federally tax-advantaged way to save and invest for a child's post-secondary education. Efforts by states to identify new sources of tax revenue, however, threaten...

Reverse Spin: Board members' seats may get hot.(Briefs)
August 25, 2003... Byline: Frederick P. Gabriel Jr. Federal regulators are about to play hardball with corporate directors. The Securities and Exchange Commission's enforcement chief, Stephen Cutler, says the commission is stepping up its efforts to...

Short Interests - Variable annuities show signs of life: Flows up 88%.(News)
August 25, 2003... Byline: Rick Miller and Frank Kelly After a few years of stagnant sales, the variable-annuity industry is beginning to see signs of a pickup in business. Second-quarter net flows for U.S. variable annuities were $12 billion, an...

Taking Sides: Blackout shines bright light on office disaster plans.(Opinion)
August 25, 2003... Many financial service providers in the Northeast and Midwest noted that their offices' emergency systems had passed the test during the blackout of Aug. 14 and 15. Many had taken steps to prepare for disaster after the Sept. 11, 2001,...

Utility stocks bathing in afterglow; Some analysts see investment opportunities.(News)
August 25, 2003... Byline: Rick Miller After spending hours in the dark, New York financial adviser Lewis Altfest thinks it's time to shine a light on electric utility stocks. "I'm going to take a good, long look at the utilities,'' says Mr. Altfest,...

Product Watch: Manulife makes retirement planning easy as 1, 2, 3.(News)
August 25, 2003... The Manufacturers Life Insurance Co. (U.S.A.) in Boston has introduced a retirement planning program to help fulfill the retirement goals of 401(k) plan participants. Manulife USA has implemented a three-step process to make it easier for...

New corporate trail: A trial; Court may be only refuge from securities class action blitz.(News)
August 25, 2003... Byline: Jeff Benjamin With the staggering number of securities class actions and the monetary value of the suits nearing record highs, corporate defense lawyers are considering a new tactic: actually taking the cases to trial. John F....

For pioneer Campanale, it's a wrap; Out as CEO of Smith Barney's pace-setting Consulting Group.(News)
August 25, 2003... Byline: Bruce Kelly Frank Campanale, the president and chief executive at the Smith Barney Consulting Group of Wilmington, Del., is out as the head of the widely acknowledged leader in the separate-accounts industry, say sources close to...

College financing as competitive as admissions; College savings plans now duking it out.(News)
August 25, 2003... Byline: David Hoffman Competition among college savings plans is heating up. Tax law changes passed in May make college savings programs that once took a back seat to Section 529 plans more attractive, according to a study by Jennifer...

Now they're going to bat for investors; Two ex-major leaguers follow different paths.(News)
August 25, 2003... Byline: Brooke Southall Financial planning is a frequent choice of professional athletes as a second career. But Bill North and John A. Castino - both of whom have spent longer in their second careers than their first - show what very...