Investment News articles from February 2004

Investment News archives from February 2004

Monday Morning: Talk is cheap, especially about disclosure.(News)
February 2, 2004... Byline: Bruce Kelly Executives in the broker-dealer industry talk frequently these days about the importance of disclosure. At conferences and meetings, leaders of firms stand on podiums, flip on computers for PowerPoint presentations...

Street Wise: Catching a ride on the small-cap-rally express.(The Markets)
February 2, 2004... Byline: Jeff Benjamin Buying stock in a company that has already seen its share price double over the past year might scare some investors. Not Mary Lisanti - especially not at this point in the economic cycle. The president and...

At the Bell.(Late News)
February 2, 2004... Sallie Mae faces SEC inquiry * SLM Corp. of Reston, Va., known as Sallie Mae, Friday disclosed a Securities and Exchange Commission inquiry into its accounting. The nation's largest holder of student loans said in a brief statement...

Were jobs lost or created in 2003?(Opinion)
February 2, 2004... Pundits wailed last month when the Bureau of Labor Statistics reported its establishment survey showing that the economy had created only 1,000 new jobs in December. The statisticians also reported that 73,000 jobs had been lost during all of...

SEC looking into use or misuse of 12(b)-1 fees; Has the rule kept up with the industry?(News)
February 2, 2004... Byline: Frederick P. Gabriel Jr. The Securities and Exchange Commission is taking a close look at 12(b)-1 fees - again. When first introduced in 1980, 12(b)-1 fees were supposed to be a temporary measure to help small funds recoup...

Conference Call - Indy beginning: A call for a level playing field.(News)
February 2, 2004... Byline: Bruce Kelly The new Financial Services Institute, a trade group for independent broker-dealers, has a broad agenda that includes cultivating a more in-your-face attitude with federal and state regulators. And the Atlanta-based...

Meet fund industry's latest streak hitters; Can anyone be next Bill Miller?(News)
February 2, 2004... Byline: Rick Miller Bill Miller, don't look back; something - or someone - might be gaining on you. Some other fund managers are building impressive streaks beating their indexes, giving the renowned manager of Legg Mason Value Trust,...

Variable annuities face new scrutiny; May make good targets for market timers.(News)
February 2, 2004... Byline: David Hoffman Many mutual funds underlying variable annuities saw "eye-popping'' levels of sales and redemptions in 2003, according to research by Lipper Inc., a mutual fund research firm in New York. Some of that trading must...

Moving Up.(News)
February 2, 2004... * Raymond James Financial Services Inc. in St. Petersburg, Fla., has hired C. Kent Christian, 42, as senior vice president and director of sales. He assumes senior supervisory responsibility for more than 1,300 branch offices and 3,000...

Taking Sides: Deficits make hike in taxes inevitable.(Opinion)
February 2, 2004... The new reports on the projected deficits for the next decade should serve as a timely warning to financial advisers and their clients. Because of those deficits, financial matters soon will become more complicated. That is because the...

Advisers depreciate antiques as investments; Don't expect them to feather nest eggs.(News)
February 2, 2004... Byline: Michael Ferrarella To the Chubb Group of Insurance Cos., antiques such as paintings, furniture and decorative objects belong in investment portfolios. But some financial advisers disagree. Such advisers think antiques should be...

Reverse Spin: Putnam tries to score brownie points.(Briefs)
February 2, 2004... Byline: Frederick P. Gabriel Jr. Putnam Investments LLC, which is certainly in need of a little "sugar'' from shareholders these days, Tuesday said that it will cut investor fees by $35 million a year and provide better fund data. The...

One on One: "We have such a huge advantage over some of the new entrants into this marketplace".(News)
February 2, 2004... Byline: Bruce Kelly J. Thomas Bradley Jr. is on the hunt for more adviser assets. The 41-year-old president of TD Waterhouse Institutional Services has an aggressive growth plan, including a doubling this year of the firm's sales staff to...

Some leery of Spitzer-ordered research $; Vying for brokers' pie `horrible idea' to a few.(News)
February 2, 2004... Byline: Joanna Sabatini Not all small independent-research firms - which pride themselves on providing accurate and unbiased stock recommendations - are scrounging for a share of the hundreds of millions of dollars to be paid out by 10...

At Issue: Legal market timing can tilt odds in investor's favor.(Opinion)
February 2, 2004... Mike Clowes' Nov. 24 Monday Morning, "Service promises to time market shifts,'' brings to mind Voltaire's saying: "The perfect is the enemy of the good.'' The bottom line is, market timing doesn't have to be perfect for it to be a viable...

Short Interests: Abs of steel, yes, but no stomach to continue job.(News)
February 2, 2004... Byline: Jeff Benjamin, Sara Hansard and Brooke Southall Dion Friedland has resigned from his post as president of The Hedge Fund Association so that he can spend more time on the beach - muscle beach, that is. The 61-year-old amateur...

Conference Call: Too much green may blunt hedgers' edge.(News)
February 2, 2004... Byline: David Hoffman Average long-term hedge fund performance is surprisingly good, but Roger Ibbotson, chairman of Ibbotson Associates Inc. in Chicago, believes that performance may be threatened by massive inflows of cash expected to...

Bond arbitration cases boom; More cases expected as interest rates rise.(News)
February 2, 2004... Byline: Sara Hansard Arbitration cases against advisers and brokerage firms involving bond sales increased sharply in 2003 as some advisers felt the repercussions of pushing bonds as "safe and secure'' during the recent market slump. ...

Schwab's referrals drying up? New honcho says demand still exists.(News)
February 2, 2004... Byline: Brooke Southall While Charles Schwab & Co. Inc.'s nationwide referral service for financial advisers is going like gangbusters, some worry that the program is rapidly running its course. Schwab's Advisor Network program handed...

A new way to sniff out market timing, late trading; Will funds with a lot of redemptions be unfairly penalized?(News)
February 2, 2004... Byline: David Hoffman Ibbotson Associates Inc. in Chicago expects to institute a new objective measurement that will allow it to avoid recommending mutual funds where market timing and late trading are rampant. But at least one...

NASD tackles thorny broker issue; Seeks details on firms' complaint disclosures.(News)
February 2, 2004... Byline: Bruce Kelly NASD regulators have been digging deeper and deeper into one of the brokerage industry's most sensitive issues: how a firm discloses customer complaints about its brokers. Over the past couple of years, NASD has...

SEC may reignite debate over advice; Mulls same standards for brokers, advisers.(News)
February 2, 2004... Byline: Frederick P. Gabriel Jr. The Securities and Exchange Commission, looking at an industry where the traditional line between stockbrokers and investment advisers has blurred, is considering a proposal that would apply similar...

Tax Watch: Tax-advantaged savings plans pushed on Hill.(News)
February 2, 2004... Byline: Mark Battersby Republican members of the Senate Finance and House Ways and Means committees have announced plans to introduce a bill that would create tax-advantaged savings accounts similar to those in an earlier proposal from the...

Monday Morning: Finding money trees in our forests.(News)
February 9, 2004... Byline: Mike Clowes Money may not grow on trees, but trees can grow into money. That is a fact a few large pension funds and wealthy individuals seeking absolute-return investment vehicles with low correlation to the stock market have...

Strong sales growth last year augurs well for 2004; Records set at MetLife, Hartford, Jackson.(News)
February 9, 2004... Byline: Rick Miller A booming stock market and popular optional riders helped put some zing back into variable annuity sales in 2003, with a few insurance companies reporting record sales for the year. The Hartford in Connecticut,...

At Issue - Market-timing policy: Keep it simple, please.(Opinion)
February 9, 2004... One of the real bright lights in the recent SEC mutual fund reform proposals is the call for fund firms to define their market-timing policies with specificity. While a few have fairly well-defined exchange policies, almost all are...

Top 10 signs your compliance needs work; NASAA will publish list of deficiencies.(News)
February 9, 2004... Byline: Sara Hansard Over the next six months, state securities regulators will publish on their website a top-10 list of deficiencies at state-registered investment advisory firms. The list will likely show the same types of problems...

A broker service fee could benefit everyone; If all trailer fees are eliminated, investors may be harmed and brokers may lose an incentive to give service.(Opinion)
February 9, 2004... Byline: Ilene Davis There is a saying, "Be careful what you wish for; you might just get it.'' I am not a fan of either B or C shares for mutual funds. The only case where I can justify C shares' being in the clients' best...

Other Views: Clarifying key points about B shares; It's time to rethink our stances on which is the `bad' share class.(Opinion)
February 9, 2004... Byline: Cynthia E. Zalewsky I am a fee-only investment adviser, but I nevertheless felt compelled to respond to the Jan. 19 article "Latest regulatory target: Class B share sales abuse.'' When educating my clients about various...

Regulators eyeing fee-based accounts; SRO competition cited as a factor.(News)
February 9, 2004... Byline: Bruce Kelly Fee-based advisers, the self-styled white knights of the financial services industry, face increased scrutiny from securities regulators. Such brokers and financial ad- visers have long argued that charging a client...

Following the money can cost a bundle; Currency trading is hot but dangerous.(News)
February 9, 2004... Byline: Jeff Benjamin Global currency markets, once the exclusive province of the most sophisticated traders, have emerged as the latest fascination among enthusiastic retail investors. But while the market is currently flush with what...

Datebook.(Calendar/Datebook)
February 9, 2004... FEBRUARY 11 - Creating a Pipeline of New Affluent Clients, Resource Network LTD. New York Athletic Club. resourcenetworkltd.com. 11-13 - Global Family Office Summit: Wealth Management Strategies for Family Office Members and...

Putnam moves to keep key execs; Mutual fund giant will pay bonuses early.(News)
February 9, 2004... Byline: Frederick P. Gabriel Jr. Putnam Investments LLC is taking steps to avert a possible brain drain. The Boston-based mutual fund giant will hand key employees their 2003 bonuses Friday instead of mid-March, when it usually makes...

Performance questions could hurt ETF growth; Some contend they lag their index fund counterparts.(News)
February 9, 2004... Byline: David Hoffman Critics of exchange traded funds say that a belief that ETFs generally underperform their corresponding index funds could imperil the growth of the industry. "I think if [ETFs] consistently underperform... that...

Fight brews over VA sales practice regulation; State oversight shift to securities cops eyed.(News)
February 9, 2004... Byline: Rick Miller A dozen states are expected to take up legislation this year that could mean another layer of regulation for sellers of variable annuities. As a result, supporters and critics of a provision that would give state...

Short Interests: Senate bill would tighten COLI benefit restrictions.(News)
February 9, 2004... Byline: Sara Hansard, Bruce Kelly and Rick Miller Under legislation approved last week by the Senate Finance Committee, corporate-owned-life-insurance benefits would become subject to income tax unless certain conditions were met. In...

Tax Watch - Report to Congress: AMT is No. 1 problem.(News)
February 9, 2004... Byline: Mark Battersby Nina E. Olson, a national taxpayer advocate, has released an annual report to Congress that identifies the alternative minimum tax and sole-proprietor tax non-compliance as the top two problems taxpayers face. In her...

Reverse Spin: MFS not too proud to settle with SEC.(Briefs)
February 9, 2004... Byline: Frederick P. Gabriel Jr. and Bruce Kelly The "MFS'' in "MFS Investment Management'' officially stands for "Massachusetts Financial Services,'' but after last week's news, it might just as well stand for "mutual fund scandal.'' ...

Taking Sides: Bush's fiscal 2005 budget rates just a so-so grade.(Opinion)
February 9, 2004... Give President Bush's fiscal 2005 budget a C+. Considering the domestic economic and worldwide political situation in an election year, it is probably as good as anyone could do. The budget makes a modest attempt to slow the growth of...

Street Wise: Mellon hedge fund unit capitalizes on rising stocks.(The Markets)
February 9, 2004... Byline: Jeff Benjamin The recent move by Mellon Financial Corp.'s alternative-investment group to offer a convertible-bond-arbitrage strategy could benefit from a bullish trend in the equity markets. Mellon HBV, the New York-based...

At the Bell.(Late News)
February 9, 2004... RIA business jumps at Fidelity * Fidelity Investments in Boston said Thursday that it saw record growth last year in the assets under its custody for registered investment advisers. At the end of 2003, assets totaled $100 billion, up...

One on One: "It all boils back down to disclosure; that's at the very core of everything we do".(News)
February 9, 2004... Byline: Sara Hansard The new president of the North American Securities Administrators Association Inc. stands out among state securities regulators. For one thing, he is unusual in that he isn't a lawyer. Ralph Lambiase worked his way...

Efforts fail to bring cheap 401(k)s to small businesses; Some are optimistic it still can happen.(News)
February 9, 2004... Byline: Brooke Southall Financial advisers' dream of getting a piece of the $350 billion 401(k) market represented by small businesses has been deferred. With the advent of web-based technology from a number of startups and traditional...

Homing in on fund fees that fly under the radar; Zero Alpha study focuses on implicit trading costs.(News)
February 9, 2004... Byline: Brooke Southall The Securities and Exchange Commission may be about to scrutinize a little-known mutual fund cost that can pile on expenses unbeknownst to individual investors. These so-called implicit trading costs can run up...

Savings plans have a shot on Capitol Hill; Retirement proposals most likely to pass.(News)
February 9, 2004... Byline: Sara Hansard President Bush's savings proposals will face tough opposition on Capitol Hill, but there is a strong likelihood that Republicans and Democrats can reach a compromise to simplify and expand retirement accounts. The...

Unimplicated feeling pressure to cut fees; All fund firms subject to trade-abuse fallout.(News)
February 16, 2004... Byline: Frederick P. Gabriel Jr. The investigation into mutual fund trading abuses is putting unprecedented pressure on fund companies to lower fees. Nearly all fund companies - even those not directly involved in the continuing fund...

Taxing situation for independents; IRS ombudsman advocates withholding for reps.(News)
February 16, 2004... Byline: Bruce Kelly The "independent-contractor'' status of the 150,000 or so registered representatives who work as brokers affiliated with broker-dealers may be in jeopardy once again. Such brokers aren't employed by a broker-dealer...

LSAs could threaten the existence of 529s; Proponents of college savings plans express concern to government.(News)
February 16, 2004... Byline: Rick Miller The lifetime savings accounts, as proposed in President Bush's recent budget, could be the death knell for some states' college savings plans, if not the 529 plan industry altogether. "There is a potential that the...

At the Bell.(Late News)
February 16, 2004... Lipper study cites high commissions * Lipper Inc. of New York is expected to release a study this week finding that 86 mutual funds pay commissions that exceed 100% of their expense ratios. The study fits in with current efforts to...

Street Wise: Asset allocation name of the game for SunAmerica.(The Markets)
February 16, 2004... Byline: Jeff Benjamin With all the recent attention on mutual fund fees, it might be tough to make a case for adding another layer - but that doesn't mean the case can't be made. Steve Schoepke, vice president of research and product...

Schwab cuts prices - for some investors; Fine print details the limits to the offer.(News)
February 16, 2004... Byline: Brooke Southall Charles Schwab & Co. Inc. is making some big pricing changes, but read the fine print. The San Francisco-based broker is cutting its sacred-cow commission price of $29.95 to $24.95 effective March 1, under...

Tainted firms' damage control questioned; MFS, Putnam downplay missteps.(News)
February 16, 2004... Byline: David Hoffman MFS Investment Management is going on the defensive. The Boston-based mutual fund company is working to regain the trust and confidence of the advisers who sell its funds, in part by touting its relative innocence...

Jitters over future of the 12(b)-1 plan; SEC, Senate weigh overhaul of the fund fees.(News)
February 16, 2004... Byline: Sara Hansard Many financial planners approve of changes to 12(b)-1 plans that the Securities and Exchange Commission is considering, but now they have a new worry. The SEC is asking for public comment on eliminating the plans...

Reverse Spin: A lesson junior isn't likely to forget.(Briefs)
February 16, 2004... Byline: Frederick P. Gabriel Jr. Talk about taking candy from a baby. FleetBoston Financial Corp. on Thursday disclosed that it had improperly allowed so-called market timers to take advantage of long-term shareholders in three of its...

Short Interests: Ignorance may eventually not be so blissful.(News)
February 16, 2004... Byline: Christine S. Lee, Jeff Benjamin and Sara Hansard A national survey by Minneapolis-based American Express Co. has discovered bad habits and misperceptions, including multiple and duplicate retirement accounts, among many American...

Foes declare open season on SEC's hard fund close; 401(k) plan participants could be hit hardest.(News)
February 16, 2004... Byline: Sara Hansard A Securities and Exchange Commission proposal to protect investors from late trades is proving to be unpopular with investors, financial advisers and many financial industry groups. First advanced in October by the...

Discount broker aims to lure small investor.(News)
February 16, 2004... Byline: Bruce Kelly Charles Schwab Corp. of San Francisco last week announced a revamped lineup of services giving investors a greater range of financial advice. The advice is aimed at investors who typically fall short of Schwab's...

Hedge fund-of-funds explosion belies risks; Pace of growth impressive, but buyer beware.(News)
February 16, 2004... Byline: Jeff Benjamin Hedge fund investing is becoming more accessible with every passing quarter as the market gets virtually flooded with newly created funds of hedge funds, most of which are aimed squarely at financial advisers and...

Burnham scores with financial services; Success of one fund spawns two more.(News)
February 16, 2004... Byline: David Hoffman It has taken a while, but Burnham Asset Management Corp. in New York may have finally found its niche in the mutual fund world: funds that invest in financial services companies. The company - founded in 1989 by...

At Issue - Math lesson: Insurer plus agent equals 2, not 3.(Opinion)
February 16, 2004... Your Jan. 19 editorial ["In- vestors deserve disclosure in plain English, in plain sight''] states that investors should receive more disclosure of relationships between investment institutions, brokers and financial advisers concerning fees...

Monday Morning: Retirement fears open door to advice.(News)
February 16, 2004... Byline: Jim Pavia Have you ever stopped and wondered what keeps clients awake at night? It would certainly help you serve their needs better if you knew what financial problems were causing them sleepless nights. A recent financial...

Taking Sides: NASD right to seek review of fee-based broker accounts.(Opinion)
February 16, 2004... The new scrutiny of broker-dealer fee-based investment programs by NASD is a prudent development. After all the scandals of the past four years - from Enron Corp. to mutual fund market timing and after-hours trading - the investment...

Beware: Risky currency trading can reap huge gains - or losses.(Opinion)
February 16, 2004... Memo to financial advisers: Warn your clients that foreign-exchange trading is no place for amateurs. As Jeff Benjamin pointed out in last week's issue of InvestmentNews, such trading has become readily available to those tempted by day...

Conference Call - Waterhouse to advisers: TD Bank loves us, and you.(News)
February 16, 2004... Byline: Brooke Southall Frank J. Petrilli wasted no time. The chief executive of New York-based TD Waterhouse USA declared in his opening remarks at his company's annual national conference early this month in Orlando, Fla., that it is...

Datebook.(Calendar/Datebook)
February 16, 2004... FEBRUARY 18 - Recent Developments, Chicago Estate Planning Council. The Standard Club. (312)673-4707. 18-20 - Investment Education Symposium, Opal Financial Group. Royal Sonesta Hotel, New Orleans. (504)586-0300. 18-23 - Made in...

Investing advice follows pace of education; Plan participants' need for help identified.(News)
February 23, 2004... Byline: Phyllis Feinberg Investment advice, still in its infancy, will follow the same fast-growth path that investment education has, according to F. William McNabb III, a managing director at The Vanguard Group Inc. in Malvern, Pa. ...

Tax Watch: Reluctant taxpayer found in contempt.(News)
February 23, 2004... Byline: Mark Battersby The transcript of a recent Florida federal court case illustrates the often-tortuous path the Internal Revenue Service must follow to obtain documents from reluctant taxpayers. The agency initially served the...

Product Watch: Pru renames managed accounts.(News)
February 23, 2004... Prudential Financial Inc. in Newark, N.J., has renamed its Prudential Investments Individually Managed Accounts as JennisonDryden Managed Accounts. This change reflects the company's combination of the three institutional asset managers -...

IBM, Mantas team up to thwart mutual fund abuses; Firms offer software to monitor sales.(News)
February 23, 2004... Byline: David Hoffman Two companies are banking on the belief that if enough mutual fund companies had had the right technology in place, many of the recent scandals could have been avoided. IBM Corp. in Armonk, N.Y., has teamed up...

At the Bell.(Late News)
February 23, 2004... Lincoln won't butt in on MONY, AXA deal * Lincoln National Corp. of Philadelphia said Thursday that it won't interfere with the proposed $1.5 billion sale of The MONY Group Inc. of New York to AXA Financial Inc. of New York. Lincoln...

Fee scrutiny threatens fund supermarkets; Eliminating 12(b)-1s would erode pricing power.(News)
February 23, 2004... Byline: Brooke Southall Mutual fund supermarkets that allow investors to buy funds without paying a commission may face intense pricing pressure if regulators and legislators are successful in eliminating a controversial fee. Indeed,...

Reverse Spin: State Street Research gets slapped.(Briefs)
February 23, 2004... Byline: Frederick P. Gabriel Jr. In case you have been looking for Sgt. Schultz since the television show "Hogan's Heroes'' went off the air, you might find him working at State Street Research & Management Co. On Thursday, NASD said...

Street Wise: Real estate proves adaptable to market's vagaries.(The Markets)
February 23, 2004... Byline: Jeff Benjamin It is a common mistake to think of real estate as a singular market and just one component of a larger allocation strategy. But as veteran real estate portfolio manager Joseph Betlej has proven, real estate...

Monday Morning: Past-election guide for market forecasts.(News)
February 23, 2004... Byline: Mike Clowes Given that this is an election year, the odds are strongly in favor of a positive stock market return, but watch out in 2005 and 2006 no matter who is elected. A number of stock market analysts have noted that the...

Datebook.(Calendar/Datebook)
February 23, 2004... FEBRUARY 26-27 - Tech-Ops 2004, Financial Research Associates LLC. New York Helmsley. (800)280-8440 or frallc.com. 27 - Building Compliance Programs for Investment Advisers, National Regulatory Services. Hyatt Regency Crystal City,...

One on One: "Show me a mutual fund company that has taken more-extreme actions".(News)
February 23, 2004... Byline: Frederick P. Gabriel Jr. Last fall, Charles "Ed'' Haldeman Jr. suddenly found himself at the head of the nation's sixth-largest mutual fund company. He was named chief executive of Putnam Investments LLC in November, replacing...

Moving Up.(News)
February 23, 2004... * New York Life Insurance Co. has promoted Lyndon J. McMullen, 48, to president and CEO of its wholly owned South Korean subsidiary, New York Life Insurance Ltd. in Seoul. He had been involved with the Korean subsidiary from 1998 until...

FPA exec eyes outreach to banks, insurers, brokers; President-elect hails from large organization.(News)
February 23, 2004... Byline: Rick Miller When it comes to the Financial Planning Association's national leadership, James Barnash hails from the other side of the professional tracks. The 50-year-old Mr. Barnash, who will become president of the FPA in...

Big Board receives big blow in proposed settlements; Specialist system may be in jeopardy.(News)
February 23, 2004... Byline: Bruce Kelly Last week's proposed settlements between securities regulators and the five leading New York Stock Exchange specialist trading firms poses another blow to the Big Board's credibility, according to one analyst. "I...

Active duty: Rydex set to launch 11 funds; Addresses need for more-sophisticated strategies.(News)
February 23, 2004... Byline: Jeff Benjamin Rydex Funds this week plans to add 11 mutual funds to its current lineup of 45 funds designed primarily for active traders. The multiple launch, the largest by the Rockville, Md., company since it rolled out 14...

SEC weighs requiring fund costs in statements; Push to help investors grasp fund expenses.(News)
February 23, 2004... Byline: Frederick P. Gabriel Jr. The Securities and Exchange Commission may issue a proposal that would require mutual funds to disclose information about costs in quarterly shareholder statements, not just shareholder reports. In an...

Brokers' discount dilemma; Overhaul needed, settlements show.(News)
February 23, 2004... Byline: Bruce Kelly Some broker-dealers missed big when it came to giving clients break-point discounts for purchasing certain amounts of mutual funds, according to securities regulators. In fact, two subsidiaries of SWS Group Inc. in...

At Issue: For Rip Van SIA, a brief investment scandal recap.(Opinion)
February 23, 2004... Frederick P. Gabriel Jr.'s Feb. 2 article ["SEC may reignite debate over advice''] highlighted both the good and bad of the financial industry. Barbara Roper hits the nail on the head describing the obfuscation tactics the brokerage...

Taking Sides: Support effort to overhaul executive stock options.(Opinion)
February 23, 2004... The booming stock market has knocked the issue of executive stock options off the reform radar screen during the past year, and that is unfortunate. Luckily, TIAA-CREF is trying to bring it back into view, but it will need help from other...