Investment News articles from December 2004

Investment News archives from December 2004

Red carpet for $1B club at Schwab; But some see catering to top producers as potentially divisive.(News)
December 6, 2004... Byline: Brooke Southall SAN FRANCISCO - Charles Schwab & Co. Inc. is embracing a tried-and-true but potentially divisive strategy for expanding its adviser custody business. The San Francisco-based broker is giving financial advisers...

Taking action against SEC.(Short Interests)
December 6, 2004... Byline: Sara Hansard WASHINGTON - A Florida investment adviser who opposes exempting brokers with fee-based accounts from being regulated as advisers has filed his own petition with the Securities and Exchange Commission. Ron Rhoades,...

Model act pushes fiduciary status.(Short Interests)
December 6, 2004... Byline: Sara Hansard WASHINGTON - The National Conference of Insurance Legislators last month released a draft proposal of a model law patterned after a far-reaching proposed California regulation that would make it clear that insurance...

2 Lincoln execs key to advisers are singled out for criticism; Not forthcoming about future earnings, Smith Barney analyst Devine says.(News)
December 6, 2004... Byline: Bruce Kelly NEW YORK - A leading insurance industry analyst has pegged two executives essential to the recent remaking of Lincoln Financial Advisors Corp. and the marketing of Lincoln investment products as coming up short when it...

Using ETFs to harvest a loss but keep allocation.(Street Wise)
December 6, 2004... Byline: Jeff Benjamin If year-end tax loss harvesting is on your to-do list, there might be an opportunity for an allocation into certain exchange traded funds. Dan Dolan, the New York-based director of wealth management strategies for...

The science of selling in 'interesting times'.(Other Views)
December 6, 2004... Byline: John F. Sharry Jr. Fishing for clients was easy during the 1980s and 1990s. Plentiful and eager, investors just about jumped into the boat, chasing the dazzling lures the market dangled before them. The fishing hole may not be...

Calendar.(Calendar/Datebook)
December 6, 2004... DECEMBER 8 - Fixed-Income Summit and Expo on Technology and Electronic Trading, The Bond Market Association. Marriott Marquis, New York. sweiss @bondmarkets.com. 8 - Hedge Fund Series: Investing in Today's "Flexible Capital'' Hedge...

Firm issues warning on tax management.(Short Interests)
December 6, 2004... Byline: Brooke Southall SAN FRANCISCO - Aim before you pull the trigger. That is what Parametric Portfolio Associates in Seattle told financial advisers in a recently published report titled "The Dangers of Heavy-Handed Year-End Tax...

Do social investors follow conscience or money? SRI funds may hold questionable stock, activist claims.(News)
December 6, 2004... Byline: Ilana Polyak NEW YORK - Names such as Wal-Mart and McDonald's routinely show up in some of the country's biggest, most popular mutual funds. Yet those same names also come up frequently in socially conscious funds, which claim to...

Industry must take responsibility for lapses.(Editorial)
December 6, 2004... Just when the mutual fund industry seemed to have put the market-timing and late-trading scandals behind it, word of another investigation has surfaced. This time, investigators reportedly are checking into whether brokers used lavish...

Fewer workers in employer health plans.(Short Interests)
December 6, 2004... Byline: Gary S. Mogel NEW YORK - Rising premiums are discouraging many employees from signing up for employer-provided group health insurance plans, according to a survey of 4,700 companies by the Department of Labor. About half of...

Let the sun shine in.(Editorial)
December 6, 2004... Sunshine, so the saying goes, is the best disinfectant. As a result, the financial advice industry should soon be one of the cleanest industries in the country, judging by all the sunshine being directed upon it. Last week's...

Asset allocation portfolios target 401(k) advisers.(Product Watch)
December 6, 2004... AssetMark Investment Services Inc. in Pleasant Hill, Calif., and Fi- serv Investment Support Services in Denver have combined to launch a 401(k) solution for advisers that enables them to provide plan sponsors and participants with...

Hedge funds found to be 'far riskier' than believed; Professor: Databases paint inaccurate picture.(News)
December 6, 2004... Byline: Jeff Benjamin DETROIT - The man who rocked Wall Street in the 1970s with his now widely accepted views about the efficiency of the stock market has a lot to say about the inefficiency of hedge fund databases. Burton Malkiel, a...

SEC rethinks point-of-sale stance; Data may have to be supplied only on request.(News)
December 6, 2004... Byline: Sara Hansard WASHINGTON - The Securities and Exchange Commission is considering making its "point-of-sale'' disclosure proposal less costly to brokers. At the same time, the SEC staff wants to push forward the time at which...

New Marsh CEO sees brighter days.(Reverse Spin)
December 6, 2004... Byline: Frederick P. Gabriel Jr. Is that a light at the end of the tunnel? Michael Cherkasky, chief executive of New York's Marsh & McLennan Cos. Inc., certainly thinks so. He expects the giant insurance broker to complete its internal...

Closing Quote.(Quotes)
December 6, 2004... "Sometimes any press is good press.'' Brian Nygaard, H&R Block Financial Advisors Inc.'s chief executive and president, on the attention that the firm has been getting since being charged with civil fraud by NASD. Page 37.

Now you can put Buffett's brain in your computer; Professor claims he has cracked the code.(News)
December 6, 2004... Byline: Rick Miller CHICAGO - Warren E. Buffett wannabes take note: A mathematics professor claims to have cracked the code on the Oracle of Omaha. John Price, a visiting professor at the University of New South Wales in Sydney,...

People.
December 6, 2004... Morningstar Inc. in Chicago has named John Rekenthaler, 43, vice president of new-product development for its global operations and Patrick Reinkemeyer, 39, president of wholly owned subsidiary Morningstar Associates LLC, a registered...

Blue Cross/Shield expanding HSA offerings; But the market is still lukewarm in many states.(News)
December 6, 2004... Byline: Gary S. Mogel NEW YORK - Health savings accounts may have received a much-needed shot in the arm when the Blue Cross Blue Shield Association said late last month that within about a year, HSA plans offered by its 41 member...

When clients have a need to give money and time; Adviser helps them to plan for their charitable activities.(News)
December 6, 2004... Byline: Charles Paikert NEW YORK - "It's the soft issues that really resonate,'' according to Joseph Spada, a certified financial planner and co-founder of the Parsippany, N.J.-based Family Wealth Institute. Or is it? Mr. Spada,...

Closed-end-fund IPOs may be hazardous for investors; Underwriter fees inflate initial prices, Lipper report says.(News)
December 6, 2004... Byline: Ilana Polyak NEW YORK - This year's initial public offering of Google Inc., the Internet search engine outfit based in Mountain View, Calif., proved that investors have an appetite for IPOs again. But investors looking to replicate...

Potomac adding three unusual funds; Some say specialized offerings could have a ready market.(News)
December 6, 2004... Byline: David Hoffman NEW YORK - The Potomac Funds in New York are planning to come out with three unusual mutual funds that some industry experts said should find a ready audience. The fund group filed papers with the Securities and...

Public opposed to Merrill rule, study finds; Aids Waterhouse's stance against SEC proposal.(News)
December 6, 2004... Byline: Brooke Southall SAN FRANCISCO - TD Waterhouse Group Inc. got such a great response from financial advisers for its opposition to the so-called Merrill Lynch rule that it has made another announcement about its position to the wider...

Advisers spreading their wings.(Short Interests)
December 6, 2004... Byline: Rick Miller CHICAGO - Some financial advisers are earning commissions on, of all things, their clients' holiday shopping. Butterflymall.com is a year-old website started by Dan Sondhelm, a partner at SunStar Inc., a financial...

Bush's glacial bid to reform Social Security.(Monday Morning)
December 6, 2004... Byline: Jim Pavia Social Security needs to be fixed, and President Bush has pledged to work with Congress to handle a revamp. I am rooting for him. It has been well documented that the Social Security system in its current form will be...

Experts favor tax cuts over flat rate or sales levy.(Tax Watch)
December 6, 2004... Byline: Mark E. Battersby Speaking before the Washington-based Tax Foundation's recent annual conference, Deputy Treasury Secretary Samuel Bodman lobbied for a shake-up of the unpopular U.S. tax system. "The current tax system imposes...

RIA assets, revenue back to '99 levels, study finds; But compliance cut into '03 profit margins.(News)
December 6, 2004... Byline: Charles Paikert NEW YORK - Registered investment advisers saw assets under management and revenue rebound last year to the record-high levels of 1999, but they also saw profit margins drop as a result of increased spending on...

Black box can put investments in a black hole.(Other Views)
December 6, 2004... Byline: Gus Ochotorena Five questions for the investor: Have you ever received investment advice? Did it involve a forecast of your future needs? What do you know about the "black box'' that was used to do the forecast? Did it use sound...

CHART: Variable annuity funds; The category results vary, but they're all positive.(The Markets)
December 6, 2004... See printed publication for the following: Equity income Growth International Small-cap Junk bond Investment-grade bond

Over 10 years, most active funds underperform their benchmarks; Administrative costs cut into returns, study finds.(News)
December 6, 2004... Byline: Jennifer Blecher NEW YORK - Actively managed mutual funds consistently underperform their benchmark indexes by about 3 to 1, a new study shows. The study, which tracks 10 years of mutual fund performance, was done by Fulcrum...

Expect more government focus on Fannie and Freddie.(Conference Call)
December 6, 2004... Byline: Sara Hansard WASHINGTON - Expect further increases in enforcement activity at the Securities and Exchange Commission and more attention from Congress to government-sponsored secondary mortgage enterprises next year. That is the...

Blended policies may create coverage-commission conflict; Life insurance consultant urges advisers to disclose alternatives to clients.(News)
December 6, 2004... Byline: Gary S. Mogel NEW YORK - Life insurance agents should inform their clients about the potential cost benefits of blended policies, an industry gadfly noted, even though blending can significantly reduce commissions. Glenn Daily,...

Bond market's resilience surprises investors; Asian central banks still keen on U.S. debt.(News)
December 6, 2004... Byline: David Hoffman NEW YORK - The air is starting to come out of the bond market, but it is occurring more slowly than many industry experts predicted in a rising-interest-rate environment, and that makes life difficult for advisers and...

Is asset allocation in danger of becoming asset relocation? Architect of 401(k) discretionary management calls high-end fees unreasonable.(News)
December 6, 2004... Byline: Rick Miller CHICAGO - When it comes to discretionary management of 401(k) accounts, the pricing is all over the map - and in some cases, off the charts. With providers charging asset-based fees ranging from 0.05% to 1.5%,...

Block still falling short in investment services; Despite aggressive campaign, it can't retain advisers.(News)
December 6, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - H&R Block Inc. continues to flounder in its efforts to transform itself into a financial advisory juggernaut. Less than a year after launching a massive campaign to recruit experienced...

At the Bell; Hedge fund advisers must now register.(Late News)
December 6, 2004... The Securities and Exchange Commission has made official its rules requiring the registration of most investment advisers to hedge funds by February 2006. The SEC's 160-page adopting release, posted last Thursday, includes 55 pages...

Women depend on their children, men on their wives, for LTC.(Short Interests)
December 6, 2004... Byline: Gary S. Mogel NEW YORK - Women are more likely than men to believe that their children will be their primary caregivers if they become disabled and require long-term care, according to a poll by the Westport, Conn.-based MetLife...

One on One With William H. Gross of Pacific Investment Management Co.(One on One)
December 13, 2004... Byline: Mike Clowes William H. Gross has become the country's best-known bond guru. His soft-spoken but perceptive comments on the outlook for interest rates, inflation and other economic matters are listened to on Wall Street and in...

Separating the wheat from the chaff in retail.(Street Wise)
December 13, 2004... Byline: Jeff Benjamin With the holiday shopping season in full swing and retailers now scrambling for the biggest possible slice of pie during this make-or-break period, there may be a few timely investment opportunities worth considering....

Some mutual fund firms start to build work force up again; Fidelity, Vanguard, T. Rowe among those staffing up.(News)
December 13, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - After years of cutbacks and layoffs, some mutual fund companies are beginning to pick up the pace of hiring again. Fidelity Investments, the nation's No. 1 fund company, hired more than 2,200...

Calendar.(Calendar/Datebook)
December 13, 2004... JANUARY 2005 5 - Money Matters: Financially Fit? The New Jersey Society of Certified Public Accountants. Society headquarters, Roseland, N.J. (973)226-4494, ext. 201. 6-8 -Fixed-Income Symposium and Exposition, LaSalle Broker Dealer...

Proposed legislation targets VAs.(Short Interests)
December 13, 2004... Byline: Sara Hansard WASHINGTON - Sens. Kent Conrad, D-N.D., and Gordon Smith, R-Ore., introduced legislation last Tuesday that would allow those who annuitize their retirement assets to exclude a portion of the benefit from income for tax...

Southwest Securities on a tear with expansion plans; Hire from Oppenheimer continues broker's spree.(News)
December 13, 2004... Byline: Bruce Kelly NEW YORK - Southwest Securities Inc. continues its expansion, this time recruiting a top broker from the Houston office of Oppenheimer & Co. Inc. The Dallas firm last month hired Mari McCain, a leading...

SEC's SRO reform proposals figure to give NASD a new look; Board insiders would drop to 20%, from 52% now.(News)
December 13, 2004... Byline: Bruce Kelly NEW YORK - The structure of NASD's board of governors could face an overhaul if the Securities and Exchange Commission's proposals for changing corporate governance of self-regulatory organizations are passed. ...

Brokers, eyeing Monte Carlo, are warned that it can be dicey; Rule change, effective in two months, permits tool.(News)
December 13, 2004... Byline: Rick Miller CHICAGO - Two months away from being allowed to use Monte Carlo forecasting tools for the first time with clients, some broker-dealers are expressing a dose of skepticism. "The average adviser with the average...

Advisers key in Schwab's new ploy to win clients; Strategy uses referral network to lure rivals' wealthy customers.(News)
December 13, 2004... Byline: Brooke Southall SAN FRANCISCO - Charles Schwab & Co Inc. is developing a bold strategy that uses financial advisers as foot soldiers in the battle to win customers from rivals. The San Francisco-based discount broker is quietly...

ICI puts pressure on the SEC; Group wants more record-keeper scrutiny.(News)
December 13, 2004... Byline: Sara Hansard WASHINGTON - Fresh from a victory in getting more regulation of hedge funds, the mutual fund industry is starting to push for increasing regulation over pension plan record-keeping organizations that administer much of...

'Holy cow' is cash cow.(Short Interests)
December 13, 2004... Byline: Brooke Southall SAN FRANCISCO - "It wasn't feel-good. It was holy cow,'' said Tom Burkhart. That is how the chief executive of The Savant Group in San Francisco, which has about $550 million under management, described the...

Bid to expand tax return 'snooping' voted down.(Tax Watch)
December 13, 2004... Byline: Mark E. Battersby Congress has voted unanimously to kill a provision that would have made it easier for lawmakers and aides to look at people's income tax returns. The provision would have allowed leaders of the House and Senate...

The pulling apart of the efficient market.(Other Views)
December 13, 2004... Byline: Ilene Davis Sometimes the forester is so busy looking at the details of a tree that it's easier for a fisherman to see that the forest is dying. I'm not an economist, but I've recently learned how MBAs are taught to calculate...

Closing Quote.(Quotes)
December 13, 2004... "We're not exactly big on saving for our future. We all know the savings rate is way down from what it was 10 years ago.'' J. Michael Martin, president of Financial Advantage Inc. in Columbia, Md. Page 31.

Value-addeds add up to joint venture; Matrix USA aligns with Stern Stewart.(News)
December 13, 2004... Byline: Barry B. Burr CHICAGO - Will economic value-added produce portfolio value-added? Two New York firms, Stern Stewart & Co., a corporate consulting firm that uses modern financial theory, and Matrix USA LLC, an institutional...

Databases come out of the dark.(News)
December 13, 2004... Byline: Christine Williamson CHICAGO - A glimmer of light made its way into the murky world of hedge fund databases when Meredith Jones, director of market research at Financial Solutions LLC in Memphis, Tenn., decided to run the numbers...

Mutual fund scandal drags on and on.(Reverse Spin)
December 13, 2004... Byline: Frederick P. Gabriel Jr. Memo to all those who think the mutual fund trading scandal is winding down: Think again. As they continue to poke around the $7.6 trillion fund industry for improprieties, government regulators are now...

Warning: Your windfall may be in jeopardy; Contestant's big game-show score underscores the special needs sudden fortunes bring.(News)
December 13, 2004... Byline: Charles Paikert NEW YORK - Ken Jennings, the Mormon software engineer from Salt Lake City who holds the record as the biggest winner in the history of the game show "Jeopardy!'' probably isn't a financial planner's average client...

Improved tax incentives for LTC are receiving scant attention; IRS is increasing the deductibility levels for premiums.(News)
December 13, 2004... Byline: Rick Miller CHICAGO - The tax incentives for buying long-term-care insurance continue to improve, but some think not enough financial planners and accountants are taking notice. The Internal Revenue Service said this month that...

Bank-loan funds may find favor; Yields would rise along with interest rates because loans are at variable rates.(News)
December 13, 2004... Byline: David Hoffman NEW YORK - Some financial advisers and industry experts are talking up the benefits of a little-known investment: bank-loan funds. In a rising-interest-rate environment, with an improving economy, the funds can be...

Hispanics left out in cold, study says.(Short Interests)
December 13, 2004... Byline: Jennifer Blecher NEW YORK - Financial institutions aren't doing enough to motivate Hispanics to develop relationships with them, according to a new report from the National Council of La Raza, the largest Hispanic civil rights and...

At the Bell; NASD fines Sigma over arbitration.(Late News)
December 13, 2004... NASD on Thursday fined Sigma Financial Corp. of Ann Arbor, Mich., and its president, Jerome Rydell, $135,000 for violating the organization's code of arbitration procedure. Washington-based NASD said the firm and Mr. Rydell, who was also...

Investors expecting a hot market soon; But financial advisers think optimism is too much.(News)
December 13, 2004... Byline: David Hoffman NEW YORK - Investors are donning rose-colored glasses and financial advisers say a reality check may be in order. In a recent survey of 1,000 investors, 59% described themselves as "bulls.'' Furthermore, 40% said...

Fidelity price cuts may shake things up in Canada; 2 rivals, under fire, may follow suit.(News)
December 13, 2004... Byline: David Clarke OTTAWA - Market timers allegedly have been ripping off Canadian mutual fund investors. Now, Fidelity Investments Canada Ltd. in Toronto is hoping to shake things up in the industry even further by cutting fees. In...

Fiduciary debate intensifies; Plan sponsors seen unprotected by guild.(News)
December 13, 2004... Byline: Jeff Benjamin DETROIT - The debate over a financial adviser's fiduciary responsibility in the retirement plan marketplace has been turned up a notch with the debut early this month of the ERISA Fiduciary Guild. The Lake Oswego,...

Secondary market for VAs is emerging; Advisers are wary but willing to explore.(News)
December 13, 2004... Byline: Gary S. Mogel NEW YORK - Advisers with clients who are unhappy with the performance of their variable annuity - or who need quick cash - can advise them to sell the annuity to a gradually expanding secondary market. Insurers...

Blame Congress for high executive pay levels.(Monday Morning)
December 13, 2004... Byline: Mike Clowes Executive compensation remains a hot topic that should be of interest to all shareholders and their advisers. The $170 billion California Public Employees' Retirement System and its $117 billion sibling, the...

New Year's resolutions often neglect life insurance.(Short Interests)
December 13, 2004... Byline: Gary S. Mogel NEW YORK - Good health and greater wealth are usually high on New Year's resolution lists, but buying life insurance isn't, according to a December survey of 1,000 people by State Farm Life Insurance Co. of...

Phoenix offers tool to facilitate IRA rollovers.(Product Watch)
December 13, 2004... The Phoenix Cos. in Hartford, Conn., now offers advisers a program that targets the individual-retirement-account rollover market. It includes a kit illustrating the benefits of consolidating scattered and neglected retirement plan assets and...

Education push targets young investors, new retirees.(Conference Call)
December 13, 2004... Byline: Sara Hansard WASHINGTON - With the first serious money beginning to move out to fund investor education, a couple of themes are starting to emerge. The early money is being bet on attempts to provide education for young people just...

Corporate sweetheart deals sour investors.(Editorial)
December 13, 2004... The American corporate culture needs some serious improvement. There's growing investor concern in this country about excessive executive payouts and in general whether companies are being as transparent as they could be. One needs to look...

Actively managed ETFs get buzz.(Short Interests)
December 13, 2004... Byline: David Hoffman NEW YORK - Two well-respected names in the world of exchange traded funds have laid out vastly different visions for what actively managed ETFs should look like. Gary L. Gastineau, managing partner of ETF...

People.
December 13, 2004... The Financial Planning Association in Atlanta and Denver has named five new members to its board of directors. Each will serve a three-year term beginning Jan. 1. Kathleen Day, 57, is president of The Enrichment Group in Miami, where she...

Genworth nabs starring TV role.(Short Interests)
December 13, 2004... Byline: Rick Miller CHICAGO - To boost national awareness of its brand, Genworth Financial Inc. has played the Trump card. The Richmond, Va., insurer, spun off from Fairfield, Conn.-based General Electric Co. in the year's largest...

Free offer seen likely to spur client credit checks; Advisers say FTC program clears `psychological barrier,' as $9 fee was a deterrent.(News)
December 13, 2004... Byline: Brooke Southall SAN FRANCISCO - With credit reports soon to be at everyone's fingertips, some financial advisers say they see ways to serve their clients better and cover their own backsides in the bargain. On Dec. 1, the...

529s, loans in one package? Industry execs hear convergence is afoot.(News)
December 13, 2004... Byline: Charles Paikert NEW YORK - The idea is bold and tempting: merge the Section 529 college savings plan business with the student loan business. Combining two giant industries - the $54 billion 529 business and the $122 billion...

Turning chaos into order.(Short Interests)
December 13, 2004... Byline: Charles Paikert NEW YORK - Financial planners with clients who use old shoeboxes instead of filing cabinets may have the perfect stocking stuffer in a new book, "Organize Your Personal Finances in No Time'' (Que, 2004), by Debbie...

Opera lover Vilar's stock picks hit high note again; Amerindo fund is up 156% since '02 low.(News)
December 13, 2004... Byline: Ilana Polyak NEW YORK - Like any technology investor, Alberto Vilar has been humbled. But the fortunes of few other tech fund managers have been so closely followed. After striking it big with early-stage investments in such...

Funds of hedge funds using higher leverage; They feel pressure from wealthy investors.(News)
December 20, 2004... Byline: Christine Williamson CHICAGO - Disappointing hedge fund returns this year have significantly upped the amount of leverage some funds of hedge funds are willing to use to goose returns - primarily in cases of funds catering to...

We'll be back in January.(News)
December 20, 2004... A great deal of teamwork went into the DataBook issue. The editors of InvestmentNews know you will find the information quite useful. InvestmentNews won't publish again until Jan. 10. In that issue, we will provide the economic-outlook...

Social Security reform gives some pause.(News)
December 20, 2004... Byline: Brooke Southall SAN FRANCISCO - Wall Street and the rest of the financial advisory industry - which would appear to have the most to gain - are keeping their own political capital in reserve in the Social Security reform debate....

Ranking system evaluates fund managers; Service draws criticism, especially from index fans.(News)
December 20, 2004... Byline: Jeff Benjamin DETROIT - A new ranking system based on the track records of mutual fund managers over the course of their careers is giving financial advisers a fresh way to evaluate funds. The system, which is being rolled out...

Calendar.(Calendar/Datebook)
December 20, 2004... JANUARY 2005 5 - Money Matters: Financially Fit? The New Jersey Society of Certified Public Accountants. Society headquarters, Roseland, N.J. (973)226-4494 Ext. 201. 6-8 - Fixed-Income Symposium and Exposition, LaSalle Broker Dealer...

U.S. clearing firms ranked by number of clients.(DataBook 2004)
December 20, 2004... 1. Pershing LLC/BNY Clearing Services Number of clients: 1,100 Contact: James T. Crowley, managing director One Pershing Plaza Eighth Floor Jersey City, NJ 07399 Phone: (866) 269-8293 ...

American Century aims to be top adviser-market player; 95% of net flows already coming via intermediaries.(News)
December 20, 2004... Byline: Rick Miller CHICAGO - Once known largely as a direct-sold, no-load fund family, American Century Investment Management Inc. has a goal in the next two years of breaking into the top 10 in net sales for all intermediary-distributed...

A financial services wish list for Santa.(Editorial)
December 20, 2004... Dear Santa, We have been good, and we have tried to be nice. So here is our wish list of Christmas gifts we would like to receive, not necessarily on Christmas Day but sometime not too late in the new year: First, give us final SEC...