Investment News articles from February 2002

Investment News archives from February 2002

Variable annuity with few fees hits snag; Website pulls an ad after NASDR gripes.(News)
February 4, 2002... Byline: David Hoffman ***** Correction: * The name of John McGeeney, a lawyer for American Life Insurance Company of New York, was misspelled in an article last week about low-fee variable annuities. ***** There is no such...

Wells Fargo adds a value fund. (At the Bell).
February 4, 2002... * Wells Fargo & Co. of San Francisco on Thursday launched its 79th mutual fund, with an eye toward a sunny niche for overcast times. The Wells Fargo Small Company Value Fund was funded with seed capital and received a few additional assets in...

Broker-dealer test is made longer. (At the Bell).
February 4, 2002... * Broker-dealer representatives will face 15 more questions on their Series 63 exams, which they must pass to be licensed. The North American Securities Administrators Association announced the change Friday. Five of the 65 questions that...

ING unit revamps its annuity business. (At the Bell).
February 4, 2002... * ING U.S. Financial Services in Atlanta has reorganized and renamed the key-account unit of its annuity business in a manner it believes is a first in the industry. Managers who serve wirehouses, regional firms and independent...

Death of split-dollar life?: 'Lenient' new rules mean big tax bill for the insured.
February 4, 2002... Some split-dollar insurance plans will be all but impossible to sell under policies recently adopted by the Bush administration, insurance industry officials say -- because the insured will be hit by a big tax bill. They make that...

The cream keeps on rising to top: 62% of stellar funds do well the next year.
February 4, 2002... A common warning to investors -- that past performance does not necessarily indicate future results -- may be wrong. A new study suggests that when it comes to top-performing mutual funds, history does tend to repeat itself. "If a...

A Jones for name recognition: St. Louis broker feeling Super after 'bargain' deal to sponsor Rams' dome.
February 4, 2002... Before rolling into yesterday's Super Bowl in New Orleans' Superdome, the St. Louis Rams brokered a deal that will give their own dome a new name. The TransWorld Dome will soon be known as the Edward Jones Dome. A multimillion-dollar...

Disclosure plan for CFPs revised. (At the Bell).
February 4, 2002... * Certified financial planners would have to provide information about their compensation when asked by clients under an exposure draft of revised ethics rules released Thursday by the Certified Financial Planner Board of Standards in Denver....

FPA, Morningstar add to adviser site. (At the Bell).
February 4, 2002... * The Financial Planning Association, based in Atlanta and Denver, and Morningstar.com of Chicago have teamed up to create an information and recruiting feature on the Internet for brokers. Called the Broker-Dealer Center, the new feature will...

Corrections.
February 4, 2002... * In a chart in last week's issue listing independent broker-dealers, the address and telephone number for Raymond James Financial Services Inc. and Triad Advisors were incorrect. Raymond James' correct address is: 3 Ravinia Drive, Suite...

Old lessons are new to many investors. (Monday Morning).
February 4, 2002... Investors and their advisers can draw some important lessons from the Enron Corp. and Global Crossings Ltd. bankruptcies. None are new lessons, but they need to be repeated and relearned. First, diversification is still an investor's first...

A glitcH at a wHiz-bang brancH. (Short Interests).
February 4, 2002... Like a monument to the go-go days of the late 1990s, a glassy, flashy cylindrical building with a casinolike atmosphere has appeared on otherwise staid Market Street, just off the heart of the San Francisco's financial district. But...

Trolling for gulls. (Short Interests).
February 4, 2002... Would-be investors who try to take advantage of one too-good-to-be-true opportunity are in for a shock. "If you responded to an investment idea like this... you could get scammed!" will be the warning they receive when they click on the site....

Making it on their own. (Short Interests).
February 4, 2002... Female chief executives tend to establish, rather than acquire, their businesses, and personal achievement and autonomy, rather than the "glass ceiling," is the chief motivating factor in striking out on their own. Those are among the...

Tough act to follow. (Short Interests).
February 4, 2002... Long-term-bond issuance is projected to reach $3.9 trillion this year, down 13% from a record $4.5 trillion in 2001, according to a research report issued by The Bond Market Association. The New York-based organization said that last year's...

AmEx going for the gray in adviser ads: New campaign is aimed at the career-switcher.
February 4, 2002... Sometimes a little gray hair around the temples can be just as important as education, training and work experience. American Express Financial Advisors Inc. is making that point in a new advertising campaign that includes a series of...

Merrily they roll 'em out: Hotchkis domestic managers regain the name but not the rep.
February 4, 2002... Having escaped the belly of a whale of a brokerage, Hotchkis and Wiley Capital Management LLC in Los Angeles plans to hit the investment beach running. The firm will reestablish the Hotchkis name on its mutual fund group today. The funds...

Fleet begins reshaping of its asset ship: Name change to Columbia is just the tip of the iceberg.
February 4, 2002... FleetBoston Financial Corp., still reeling from devastating losses related to its high-risk Argentine banking operations, this week is expected to unveil the beginnings of a complicated strategy to reshape its far-flung asset management...

Fed's nothing is really something. (Reverse Spin).
February 4, 2002... Here's a case where no news really is good news. The Federal Reserve ended its yearlong campaign of interest rate cuts Wednesday, having seen enough positive signs to leave short-term interest rates where they are. The Fed's inaction came...

Fewer jobless and fewer jobs. (Reverse Spin).
February 4, 2002... * And here's a case where the news is not really as good as it seems. The U.S. unemployment rate dropped for the first time in eight months in January, but that decline was due mainly to a fall in the work force. The unemployment rate fell...

Brown Brothers says less is more. (Reverse Spin).
February 4, 2002... * Apparently not everyone on Wall Street thinks size matters. Michael W. McConnell, named Wednesday as managing partner of Brown Brothers Harriman & Co. in New York, reaffirmed a commitment to maintain the nation's oldest and largest...

Sinking ship, new captain. (Reverse Spin).
February 4, 2002... * Anyone lose a pair of rose-colored glasses? Enron Corp., the troubled energy trader, announced Tuesday that it has found an interim chief executive, one who is optimistic enough to think he can keep the Houston company from having a...

Toying with layoffs. (Reverse Spin).
February 4, 2002... * It seems as if Unemployed Barbie is going to be a big seller at Toys "R" Us. The nation's largest toy chain said Monday that it will cut 1,900 jobs and close 64 outlets. The Paramus, N.J., retailer, which might want to consider changing its...

Variable annuity with few fees hits snag: Website pulls an ad after NASDR gripes.
February 4, 2002... There is no such thing as a free lunch, much less a zero-fee variable annuity. American Life Insurance Co. of New York, a subsidiary of Inviva Securities Corp. of New York, learned that the hard way last month. John McGreeney, a lawyer...

SEC asserts authority over charitable annuities: Brings enforcement action against a promoter.
February 4, 2002... The Securities and Exchange Commission, staking out new turf, has brought its first enforcement case against a company selling charitable annuities. By leveling securities fraud charges late in December against Mid-America Foundation Inc....

Nothing to count blessings over: Catholic mutual funds in troubled waters.
February 4, 2002... Clearly, the Lord give the, and the Lord take the away. The fledgling universe of mutual funds that invest according to the basic tenets of the Catholic Church turned in mixed results last year. While few offered investors any real hope...

New analysis tool not a ticket to the moon: Advisers cool to risk analyzer.
February 4, 2002... Dennis Tito may find flying to the moon easier than getting independent financial advisers to part with $12,000 for access to his company's investment analysis. Mr. Tito, who last year paid $20 million to ride in a Russian rocket destined...

Battle looms over reforms in wake of Enron's collapse. (Taking Sides).
February 4, 2002... Even though it may take years before the dust finally settles, the Enron Corp. implosion is pretty clear cut as scandals go. Perhaps the only real questions remaining are how high the culpability goes and whether the actions of Enron and...

Are advisers up to the challenge of the new era? (At Issue).
February 4, 2002... You hit the nail on the head in "Advisers take heat for annuities chill" [Sept. 3] when you talked of opportunistic annuity salespeople and their shortsightedness. The fact is, however, that the indictment fits most of the rest of us...

Managers, advisers finding separates are distinctly different: Tech shock and weak market have pushed many to consider consultant wraps; but patience is needed. (Other Views).
February 4, 2002... Now is the time to be part of the retail separate-account business -- for both financial consultants and money managers. Assets fell slightly last year, to $415.51 billion, from $417.28 billion at yearend 2000, according to data from the Money...

Merrill adding feeders for its master funds.
February 4, 2002... It looks as if Merrill Lynch & Co. Inc. in New York is sticking to its guns. The brokerage house filed a proxy statement last month that would give a handful of its mutual funds the ability to adopt a "master feeder" structure. Most mutual...

Top Providers of Variable Annuities Ranked by Assets.
February 4, 2002... Top providers of variable annuities ranked by assets Provider Assets $mils TIAA-CREF 179,078 Hartford Life Insurance Co. 68,289 The Lincoln National Life ...

Financial giants adopt cross-selling big-time: Barriers have fallen, but clients still resist.
February 4, 2002... H&R Block Inc. telemarketers were on the phone to customers late in December -- but this time they weren't issuing reminders about April 15. Instead, the Kansas City, Mo., company was snaring tax clients for the mortgage-lending services...

Separates boss lends cachet to Russell plan. (Fast Track).
February 4, 2002... Frank Russell Co.'s new separate-accounts program for advisers was neatly packaged and positioned with Fidelity Investments' adviser platform in October. So then why did Frank Russell Co., the Tacoma, Wash., money manager, hire a...

Moving Up: Hirings & Promotions.
February 4, 2002... * John Hancock Financial Services Inc. in Boston has appointed Michael Bell, 46 senior executive vice president for the retail sector. Mr. Bell is the founder and director of Monitor Co., a management consulting firm in Boston. Mr. Bell will...

Curious as alley cats, advisers purrrsue hedge info. (Conference Call).
February 4, 2002... If a record turnout at a hedge fund conference late last month is any indicator, financial advisers are like alley cats on alternative investments -- sitting on the fence but highly curious. "I'm not sure I understand why I should be...

Variable-annuity funds: High-grade corporates shine, while growth is stunted.
February 4, 2002... Variable-annuity funds High-grade corporates shine, while growth is stunted EQUITY INCOME TOP 10 1-year % 3-year % WM Var Trust Equity Income 6.39 8.36 Endeavor Capital...

Kmart's failure could be a key to success for Kohl's. (Street Wise).
February 4, 2002... Kmart Corp. (KM), the nation's third-largest retailer, is in many ways already as good as gone. The basic Chapter 11 bankruptcy strategy is likely to boll down to across-the-board corporate shrinkage to the point of profitability. ...

Investment Watch.
February 4, 2002... Friedman Billings Ramsey Group Inc. 2000 revenues: $180.9 million 2000 earnings: $18.1 million 1999: $139 million 1999 loss: $8.7 million 52-week high: $7.77 52-week low: $4.50 P/E: N/A Price/book: 2.07 ...

"We like mid-caps because we can ... get to know them better than Wall Street does". (One on One).
February 4, 2002... Three out of every four equity funds in the United States lost money last year. Those that stayed in positive territory were likely to have been invested in either small- or mid-cap stocks, the latter a category that has long held a...

Street Wise: A beat-up stock is seen as a big web services play.(The Markets)
February 11, 2002... Byline: Jeff Benjamin SilverStream Software Inc. (SSSW) is positioning itself for big undertakings in the burgeoning web services arena. The Billerica, Mass., company simplifies and accelerates the development of sophisticated business...

SEC's pay parity push gets nowhere with Bush; Sarbanes, Pitt vow to keep up pressure.(News)
February 11, 2002... Byline: Sara Hansard The chairman of the Senate Banking Committee has accused the Bush administration of reneging on an agreement tying pay parity for Securities and Exchange Commission staff with a reduction in the fees the agency...

Taking Sides: Business as usual, yet crisis looms.(Opinion)
February 11, 2002... As disturbing as the dot-com crash was two years ago, the collapse of Enron Corp. holds the potential to be even more damaging to the stock market and ultimately to the economy. The sudden plunge in the Dow Jones Industrial Average last...

Vanguard's stealth custody play.(News)
February 11, 2002... Byline: Brooke Southall The Vanguard Group Inc. has long treated the custody of adviser assets as a necessary evil. But now its approach appears to be changing. While Vanguard is reluctant to say so, it is behaving like a company ready...

House-Senate compromise now seen likely; Bush pension reform push could advance advice bill.(News)
February 11, 2002... Byline: Sara Hansard Advocates of investment advice legislation say a compromise over differing House and Senate bills may be within reach, thanks to President Bush. As part of his pension reform package, Mr. Bush wants to make advice...

Product Watch: Lincoln National upgrading its online presence.(Briefs)
February 11, 2002... Lincoln National Corp. in Philadelphia has announced three new initiatives to integrate e-commerce into all the business lines of Lincoln Financial Group. The corporate website, lfg.com, has been redesigned and distinguishes between six...

Regulators zeroing in on brokers; New industry scrutiny revealed at conference.(News)
February 11, 2002... Byline: Bruce Kelly While broker-dealer executives complain about the burden of regulation, national and state securities regulators are about to turn up the heat. The offering of bonus variable annuities and the sale of unregistered...

Company will survive, says CEO; Buzz at FOLIOfn turns to buzzards.(News)
February 11, 2002... Byline: Sarah O'Brien For FOLIOfn Inc. and its chief executive, Steven M.H. Wallman, the hype has turned to gripe. When the former Securities and Exchange Commission member launched the Vienna, Va., company in mid-2000, it generated...

Who wants hamburger at filet mignon prices? Some funds carrying high expense ratios also are sporting some mediocre returns.(News)
February 11, 2002... Byline: David Hoffman There's no such thing as a free lunch. But should you expect to pay big bucks for table scraps? Some mutual fund companies seem to think so. They have funds with sky-high expense ratios, and as if to add...

Account software fight is like Tyson-Lewis; Advent squares off against ByAllAccounts.(News)
February 11, 2002... Byline: Brooke Southall With advisers looking to become holistic wealth managers, two software makers are betting that account consolidation programs are the next big craze. But those two companies - Advent Software Inc. of San...

Tax Watch: Making it harder for the tax man to get the ax.(News)
February 11, 2002... Byline: Mark Battersby President Bush's fiscal 2003 budget request contains several provisions that would modify the Internal Revenue Service Restructuring and Reform Act of 1998, including a proposal to strike much from one of the law's...

Monday Morning: Market quandary? Some see the light.(News)
February 11, 2002... Byline: Mike Clowes The Jan. 21 issue of InvestmentNews carried an article by Robert D. Arnott and Peter L. Bernstein arguing that a realistic long-term return for stocks going forward is only 3% to 4%, while Treasury inflation-indexed...

Closing Quote.(Quotes)
February 11, 2002... ``They're competing against a 500-pound gorilla.'' Gomez Inc. analyst Dan Burke, on whether FOLIOfn Inc. can stand up to the mutual fund industry. Page 1

At the Bell.(Late News)
February 11, 2002... B of A to settle shareholder suits Bank of America Corp. of Charlotte, N.C., said Friday it will pay former shareholders $490 million to settle all certified class actions related to investments it made in D.E. Shaw & Co. LP, a New York...

What price for advice? Some advisers extend fees to non-liquid assets.(News)
February 11, 2002... Byline: Rick Miller Whether it's about a Colorado ski condo, stock options or a 401(k) plan, financial planners are often asked to give their two cents about all kinds of client investments. But how do they get their two cents back?...

Advisers keep champagne corked; Unwilling to concede recession is ending.(News)
February 11, 2002... Byline: Frederick P. Gabriel Jr. As with Mark Twain's death, reports that the U.S. economy may be pulling out of a recession appear to have been greatly exaggerated. At least that's how financial advisers contacted by InvestmentNews...

One on One: "[It's] a business owner's approach to stock market investing".(News)
February 11, 2002... Byline: Frederick P. Gabriel Jr. Like most value investors, James R. Norris loves a bargain. But just because a company's stock is cheap doesn't mean it's a bargain. As co-manager of the C&B Mid Cap Equity fund, which is run by...

Conference Call: To tap the rich, managers must know all the steps.(News)
February 11, 2002... Byline: Rick Miller To tango with the superrich, financial institutions need advisers who can do more than just the two-step. Top private-client-services executives speaking at a panel at the American Bankers Association's Trust, Asset...

Alliance battered by Enron losses and lawsuits; The company's stock has been hit hard.(News)
February 11, 2002... Byline: Heike Wipperfurth CNS A New York money manager is fast becoming another casualty of the Enron scandal. After losing hundreds of millions of dollars on the Houston company's stock, Alliance Capital Management Holding LP has been...

Reverse Spin: Ex-Enron big as guarded as Sgt. Schultz.(Briefs)
February 11, 2002... Byline: Frederick P. Gabriel Jr. Sgt. Schultz from ``Hogan's Heroes'' would be proud. Under harsh questioning by a congressional panel Thursday, former Enron Corp. chief executive Jeffrey Skilling maintained that he knew nothing of the...

Short Interests: Follow the bouncing marriage ...(Briefs)
February 11, 2002... Byline: Rick Miller, Brooke Southall and Frederick P. Gabriel Jr. If Michael Jordan thinks he can turn around the Washington Wizards, why shouldn't he be able to revive his marriage? The pro basketball superstar's wife, Juanita,...

Websites that pay retail rebates into 529 plans taking hold; Cheeseburger, fries and college money, please.(News)
February 11, 2002... Byline: Rick Miller As gimmicky as they seem, websites that kick back a percentage of purchases into 529 college plans are helping financial advisers open more college savings accounts - and increase assets. ``It does give us a selling...

At a glance: AMVESCAP PLC.(The Markets)
February 11, 2002... 2000 revenues: $1.6 billion 1999: $1.1 billion 52-week high: $44.59 P/e: 60.98 Price/book: 3.06 2000 earnings: $255.9 million 1999: $124.7 million 52-week low: $16.20 Market cap: $9.87 billion Disappointment over its fourth-quarter...

B of A to settle shareholder suits. (At the Bell).
February 11, 2002... * Bank of America Corp. of Charlotte, N.C., said Friday it will pay former shareholders $490 million to settle all certified class actions related to investments it made in D.E. Shaw & Co. LP, a New York brokerage firm that incurred huge losses...

SIA leery of plan for analyst firewall. (At the Bell).
February 11, 2002... * The Securities Industry Association says it has "significant concerns" about analyst rules proposed by the New York Stock Exchange and endorsed by House leaders. Marc Lackritz, president of the SIA, said in Washington in a written...

Mercury to close or merge 12 funds. (At the Bell).
February 11, 2002... * The Mercury Funds, a New York unit of Merrill Lynch & Co. Inc., is continuing to reorganize itself in the hope that it will become a more attractive group to financial advisers. Frank McAleer, head of third-party distribution at Merrill...

Profit forecasts cut for wall st. houses. (At the Bell).
February 11, 2002... * Analysts took another look at Wall Street's investment banks Friday, with Prudential Securities and Salomon Smith Barney cutting their earnings estimates for Merrill Lynch & Co. Inc. and Goldman Sachs Group Inc., both of New York. Citing...

Security life adds a plan for advisers. (At the Bell).
February 11, 2002... * Security Life of Denver Insurance Co., a division of ING U.S. Financial Services, is launching today a variable universal life insurance product. The offering is designed for independent financial advisers. Called Strategic Investor...

What price for advice? Some advisers extend fees to non-liquid assets.
February 11, 2002... Whether it's about a Colorado ski condo, stock options or a 401(k) plan, financial planners are often asked to give their two cents about all kinds of client investments. But how do they get their two cents back? It's a question many...

Buzz at FOLIOfn turns to buzzards. Company will survive, says CEO.
February 11, 2002... For FOLIOfn Inc. and its chief executive, Steven M.H. Wallman, the hype has turned to gripe. When the former Securities and Exchange Commission member launched the Vienna, Va., company in mid-2000, it generated buzz as an enterprise whose...

Vanguard's stealth custody play.
February 11, 2002... The Vanguard Group Inc. has long treated the custody of adviser assets as a necessary evil. But now its approach appears to be changing. While Vanguard is reluctant to say so, it is behaving like a company ready to aggressively pursue...

Correction. (At the Bell).
February 11, 2002... * The name of John McGeeney, a lawyer for American Life Insurance Company of New York, was misspelled in an article last week about low-fee variable annuities.

Market quandary? Some see the light. (Insights & Analysis).
February 11, 2002... The Jan. 21 issue of InvestmentNews carried an article by Robert D. Arnott and Peter L. Bernstein arguing that a realistic long-term return for stocks going forward is only 3% to 4%, while Treasury inflation-indexed bonds are yielding real...

Follow the bouncing marriage. (Tips, Trends & Observations).
February 11, 2002... If Michael Jordan thinks he can turn around the Washington Wizards, why shouldn't he be able to revive his marriage? The pro basketball superstar's wife, Juanita, withdrew her divorce filing last week after the couple decided to reconcile...

You say advisor, I say adviser. (Tips, Trends & Observations).
February 11, 2002... When is financial advice provided by an adviser, and when does it come from an advisor? Deborah E. Voso recently concluded that it depends on whether you're talking about the firm or the person. Her Frederick, Md., financial advisory firm just...

Belated coup. (Tips, Trends & Observations).
February 11, 2002... Ken Wilmont has three words to say about the news last week that American Express Financial Advisors hired three respected stock pickers from Boston mutual fund giant Fidelity Investments: "It's about time." "It shows that American Express...

Who wants hamburger at filet mignon prices? Some funds carrying high expense ratios also are sporting some mediocre returns.
February 11, 2002... There's no such thing as a free lunch. But should you expect to pay big bucks for table scraps? Some mutual fund companies seem to think so. They have funds with sky-high expense ratios, and as if to add insult to injury, the funds are...

Bush pension reform push could advance advice bill: House-Senate compromise now seen likely.
February 11, 2002... Advocates of investment advice legislation say a compromise over differing House and Senate bills may be within reach, thanks to President Bush. As part of his pension reform package, Mr. Bush wants to make advice available to employees...

Advisers keep champagne corked: Unwilling to concede recession is ending.
February 11, 2002... As with Mark Twain's death, reports that the U.S. economy may be pulling out of a recession appear to have been greatly exaggerated. At least that's how financial advisers contacted by Investment-News see it. Despite last week's wild...

Ex-Enron big as guarded as Sgt. Schultz. (The Week in Review).
February 11, 2002... Sgt. Schultz from "Hogan's Heroes" would be proud. Under harsh questioning by a congressional panel Thursday, former Enron Corp. chief executive Jeffrey Skilling maintained that he knew nothing of the self-dealing and accounting schemes...

Plastic palls. (The Week in Review).
February 11, 2002... * You know times are tough when Americans cut back on their use of plastic. Overall consumer credit out-standing fell unexpectedly in December as shoppers put fewer of their Christmas gifts on credit cards, the Federal Reserve said...

Investment buff feels the pain. (The Week in Review).
February 11, 2002... * "Ode to the Buff Man": Roses are red, violets are blue, thanks to some bad times, a $1 billion loss is on you. Berkshire Hathaway Inc. of Omaha, Neb., the investment arm of billionaire Warren Buffett, said Tuesday that fourth-quarter...

Nine lives? (The Week in Review).
February 11, 2002... * Maybe nine heads are better than one. Merrill Lynch & Co. Inc. in New York confirmed Friday that it has formed a new committee to address strategy and operating issues affecting the nation's largest brokerage firm. E. Stanley O'Neal,...

An investor's Don Quixote? (The Week in Review).
February 11, 2002... * Let's hope Jerry Paul isn't fighting windmills. Weeks after leaving Denver based INVESCO Funds Group Inc., where he was head of fixed income, Mr. Paul has launched Quixote Capital Management LLC, also in Denver. He plans to offer mutual...