Investment News articles from July 2003

Investment News archives from July 2003

Telemarketing curbs to hit rookie brokers; Cold calling, a beginner's task, gets tougher.(News)
July 14, 2003... Byline: Sara Hansard As consumers continue to sign up in droves for the Federal Trade Commission's "do not call'' list, financial advisers speculate it will affect the industry by making it more difficult for new brokers to get started....

Taking Sides: Vanguard right in giving cold shoulder to hot money.(Opinion)
July 14, 2003... Whether or not you agree with the reasoning behind The Vanguard Group Inc.'s decision to close its High-Yield Corporate Bond Fund to new investors for at least three months, the move must be applauded. Vanguard has acted in what it...

Tax Watch: Client-attorney privilege challenged in shelter case.(News)
July 14, 2003... Byline: Mark Battersby The government recently took unprecedented action against a Dallas-based law firm, seeking the names of taxpayers that the Internal Revenue Service believes participated in abusive tax shelters. Those shelters had...

Street Wise: A mid-cap manager who covets the spotlight.(The Markets)
July 14, 2003... Byline: Jeff Benjamin Five years of managing a mid-cap stock portfolio has introduced Tony Dong to the realities of what he calls the "middle-child syndrome.'' While mid-caps have long lingered near the bottom of the asset-allocation...

Reverse Spin: State Street workers took money and ran.(Briefs)
July 14, 2003... Byline: Frederick P. Gabriel Jr. This is what happens when you offer a nice severance package at the start of the summer months in New England. State Street Corp., the Boston-based company that holds trillions of dollars worth of...

Product Watch: Number of funds in the Ivy group climbs to 19.(News)
July 14, 2003... Waddell & Reed Financial Inc. in Overland Park, Kan., has expanded its Ivy Funds group to encompass 19 funds. Shareholders of Ivy Funds approved the merging of several Ivy funds into similar ones in the W&R Funds group, which will now carry...

Taking Sides: Long-term-care tax credit worth it in the long run.(Opinion)
July 14, 2003... Long-term-care insurance should be part of every financial plan, as many planners and advisers recognize. However, many people resist buying it because of its complexity and seemingly high cost. Legislation introduced in both houses of...

Race is on to snare superrich; Adviser, private bank focus shifts upward.(News)
July 14, 2003... Byline: Bruce Kelly Private banks and investment advisers over the next few years are expected to fight tooth and nail for wealthy clients, according to a new survey. And the fierce competition is expected to be most intense for the...

Monday Morning: 'Average' Americans can use financial advice.(News)
July 14, 2003... Byline: Jim Pavia A few years ago, a friend of mine won $250,000 in a lottery. When he eventually calmed down, the first thing he did was find a financial adviser. This guy wasn't wealthy; he was your average American worker. He said he...

Fast Track: Barclays newcomer makes push for iShares.(News)
July 14, 2003... Byline: Brooke Southall The general thinking about index funds is that they aren't sold, they're bought. But Valerie Petrone Corradini, 37, doesn't have the luxury of thinking in that passive manner. Barclays Global Investors...

Advisers should know how wealthy think; Mature approach needed, exec says.(News)
July 14, 2003... Byline: Bruce Kelly What F. Scott Fitzgerald supposedly told Ernest Hemingway is true: The rich are different from everyone else. But it's understanding how the rich are different from each other that can help brokers and financial...

Datebook.(Calendar/Datebook)
July 14, 2003... JULY 13-18 - Residency Program, Financial Planning Association. DePaul University, Chicago. (800)322-4237. 17 - Dialogue Series, Financial Planning Association. Chicago Botanic Gardens. (800)322-4237. 20-22 - Investment Trends...

Many companies will meet or top 2Q forecasts; longer term still murky; Earnings season likely to be a mixed bag.(News)
July 14, 2003... Byline: Jeff Benjamin It's hammer time for much of corporate America as the conclusion of the second quarter leads into what Wall Street likes to call "earnings season.'' Over the next three weeks, roughly 80% of the publicly traded...

Insurer pushes investments; Northwestern seeks competitive edge.(News)
July 14, 2003... Byline: David Hoffman Northwestern Mutual Life Insurance Co. has always provided life insurance products, but it wasn't until recently that the Milwaukee-based company started pushing investment products and services to hone its...

Advisers are skeptical that the rally is real; Questions raised on economy's vigor.(News)
July 14, 2003... Byline: Frederick P. Gabriel Jr. The stock market is climbing a wall of skepticism, at least among investment advisers. Though the market has climbed steadily since March and many on Wall Street profess optimism, some advisers are...

Did the CEO fudge his resume? Funds do more detective work.(News)
July 14, 2003... Byline: Rick Miller Some mutual fund companies, wary of investing in a corporation run by the likes of Enron Corp.'s Kenneth Lay or WorldCom Inc.'s Bernard Ebbers, are resorting to a practice associated more with detective work than with...

Knowing clients: How much is enough?(News)
July 14, 2003... Byline: Rick Miller It's not nearly as severe as hiring a private eye to trail a client, but in certain circumstances, outside companies are being hired to give customers the once-over. That's expected to increase as banks, brokers and...

At Issue; The pros and cons of AmEx's score card system.(Letters)
July 14, 2003... I write in response to the June 23 article, "AmEx score card won't add up for some,'' for which I was interviewed. A substantial number, if not a majority, of advisers currently at the 85% payout rate will remain at that rate. The article's...

Costs associated with identifying victims may prove prohibitive; Some fund holders may have to settle for zip.(News)
July 14, 2003... Byline: Frederick P. Gabriel Jr. Mutual funds may be able to collect a chunk of the $1.4 billion conflict-of-interest settlement between major Wall Street firms and regulators, but investors who bailed from those funds are likely to get...

Opinions split over the need for new designation for back-office support personnel; Yet another credential is in the pipeline.(News)
July 14, 2003... Byline: Sara Hansard Adding to the glut of financial services credentials already on the market will be another designation for financial services support personnel. LOMA, a trade association for life insurance office management...

Insurers, funds charge up the Hill; Law proposes to make LTC costs deductible.(News)
July 14, 2003... Byline: Sara Hansard A piece of legislation favored by life insurers is gaining steam, while the mutual fund industry is determined to make sure another such bill won't leave it at a disadvantage. The chairman of the Senate Finance...

Moving Up.(News)
July 14, 2003... * Minnesota Life Insurance Co. in St. Paul has appointed four officers of its asset management affiliate Advantus Capital Management to positions with the insurer. Both units are subsidiaries of Securian Financial Group. Minnesota Life...

Lance Armstrong eyes market cycle; Sends enthusiastic e-mails about the rally.(News)
July 14, 2003... Byline: Brooke Southall Lance Armstrong is attempting to bring his string of consecutive Tour de France victories to five - but he also has other numbers on his mind: those of the Dow Jones Industrial Average and the Standard & Poor's 500...

One on One: "People are looking and realizing they've got to protect themselves on the downside".(News)
July 14, 2003... Byline: Jeff Benjamin Albert "Skip'' Viragh, president and founder of the Rydex funds, is gradually relinquishing some of the control he has over the asset management firm he started 10 years ago next week. Having turned 62 just a few...

At the Bell.(Late News)
July 14, 2003... Schwab's advisers bullish on economy * Almost all Schwab Institutional advisers responding to a recent survey think that the economy is either getting better or staying the same. According to the study of 174 advisers, about 64% agreed...

Short Interests: Unclear future for mutual fund transparency bill.(News)
July 14, 2003... Byline: Sara Hansard, Frank Kelly and Rick Miller Legislation to increase mutual fund transparency is in trouble. Following what was described by a Capitol Hill insider as a "raucous caucus'' among Republican members of the House...

S&P banks on new fund methodology; Seeking to strengthen its ties with advisers.(News)
July 14, 2003... Byline: Frederick P. Gabriel Jr. Standard & Poor's is trying to strengthen its ties with financial advisers. To this end, the New York-based company, better known for evaluating bonds and individual stocks, is developing a new...

Charity begins at school; 529 plans can benefit scholarship programs.(News)
July 21, 2003... Byline: Rick Miller Considering the billions of dollars parked in Section 529 college savings plans, it's hard to imagine there's a benefit from the plans that financial advisers have yet to tap. But plan distributors say an...

At Issue; Soft-dollar payments are hard to justify.(Letters)
July 21, 2003... In "Give the soft-dollar practice a chance'' [Taking Sides, June 23], you state that you have long favored banning soft-dollar payments for research, but now you are not so sure. Allow me to disagree; I am in favor of a ban. In your second...

One on One: "I never let the good publicity get to my head, and the bad publicity never really bothered me".(News)
July 21, 2003... Byline: Frederick P. Gabriel Jr. Ryan Jacob, the 33-year-old mutual fund manager who became a whipping boy for the Internet crash, has returned to the top of the charts. The $100 million Jacob Internet Fund is listed by Morningstar...

Venture capitalists looking venturesome; Some companies' deals even are being bid up.(News)
July 21, 2003... Byline: Jeff Benjamin The venture capital industry is shifting back into attack mode. Even though the targets these days are considerably fewer and farther between than they were a few years ago, when venture funding was at its peak,...

AIG's grand design showing some cracks; Bear market stalls broker-dealer expansion.(News)
July 21, 2003... Byline: Bruce Kelly The bear market has put up a roadblock to the AIG Advisor Group Inc.'s grand plans for expansion. Each of the network's six broker-dealers last year saw revenue remain flat or drop as much as 12% from that of 2001,...

M&A activity likely to heat up; Bull's-eyes on the asset managers.(News)
July 21, 2003... Byline: Frederick P. Gabriel Jr. After a three-year hiatus, asset management companies are back on the prowl. Year-to-date, the number of mergers and acquisitions announced in the sector is about the same as it was at a similar stage...

Product Watch: Morningstar ramps up variable-annuity database.(News)
July 21, 2003... Morningstar Inc. in Chicago has significantly enhanced its proprietary variable-annuity data, creating a large, comprehensive annuity data store. The Morningstar database now includes full coverage of 975 variable-life policies, 30,500...

Monday Morning: Making math really count for something.(News)
July 21, 2003... Byline: Mike Clowes Last month, more than half of the high school students who took the New York State Board of Regents mathematics exam, which they needed to pass to graduate, failed. The distressing failure rate is evidence of poor...

Tax Watch: IRS concedes case but is upheld on costs issue.(News)
July 21, 2003... Byline: Mark Battersby The U.S. Tax Court has ruled that the Internal Revenue Service's position in a recent case was justified under the tax rules. James and Sherri Goertler filed a joint return in 1998 that had been prepared by a...

Short Interests: Think investing is a snap?(News)
July 21, 2003... Byline: David Hoffman and Frank Kelly Mutual fund analysts compare the $1 million Apex Mid Cap Growth Fund, offered by Bhirud Funds Inc. in Stamford, Conn., to a mousetrap because it is apt to catch foolish investors. The cheese: a...

Small-cap stocks in rally mode.(News)
July 21, 2003... Byline: Frederick P. Gabriel Jr. Small may be beautiful in the current stock market rally. The average small-cap fund tracked by Lipper Inc. climbed 2.44% in the one-week period through July 10, well above the 0.63% return posted by...

`A lot of talk' about how to bill clients for services; FPA study: Nearly half charge flat fee for planning.(News)
July 21, 2003... Byline: Rick Miller A recent study commissioned by the Financial Planning Association lists what financial planners are charging for advice. Based on a survey of 650 FPA members around the country, the report indicates that advisers...

'Industry Attitudes' survey due.(News)
July 21, 2003... We want to know what you, 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...

Disclosure bill gets mixed reaction from industry; Fund disclosure debate: More or better?(News)
July 21, 2003... Byline: Sara Hansard The Securities and Exchange Commission wants to review the disclosure system for mutual funds. But some market participants argue that what's needed is better, not more, disclosure, as the issue continues to divide...

Deal to help subadviser reach more investors, advisers; ING fund to bring wider exposure to Baer.(News)
July 21, 2003... Byline: David Hoffman Attracting assets will get a lot easier for Julius Baer Investment Management Inc. in Los Angeles, a subsidiary of the Julius Baer Group in Zurich, Switzerland. ING U.S. Financial Services in Atlanta recently...

From Japan stocks, a glimmer; But skeptics are also abundant.(News)
July 21, 2003... Byline: Rick Miller While an investment tip from Legg Mason Value Trust manager Bill Miller may be akin to gospel truth, his praise for Japanese stocks has its share of disbelievers. Japan "is a basket case, and it will stay that...

Taking Sides: Time to put the politics aside.(Opinion)
July 21, 2003... The securities fraud legislation now before a key committee in the House of Representatives has created a war of words in the political arena. It's time for politicians to cut out the posturing, go back to the drawing table and create a...

Gold starting to lose its luster.(News)
July 21, 2003... Byline: Frederick P. Gabriel Jr. So much for going for the gold. After two straight years at the top of the mutual fund heap, gold-oriented funds have finally lost their luster. Year-to-date through last Thursday, the average gold...

CFP Board CEO quits.(News)
July 21, 2003... Byline: Rick Miller Nearly two years after leaving the private sector to lead the Certified Financial Planner Board of Standards Inc., Louis Garday is returning to his roots. Mr. Garday, who some say was frustrated over the limitations...

Most experts still bullish on bonds; But consensus lacking on which type to buy.(Fixed Income)
July 21, 2003... Byline: David Hoffman With interest rates at record lows, experts agree that investors should still be holding bonds. The question is, which kind? Financial advisers and economists say investors should have learned when the technology...

Street Wise: Broadband company sees profits on horizon.(The Markets)
July 21, 2003... Byline: Jeff Benjamin The market may be starting to recognize the potential of Eagle Broadband Inc. (EAG). The stock, which closed Thursday at 54 cents a share, had risen 145% over the previous three months and 35% over the previous 30...

Reverse Spin: Prince to become the king of Citigroup.(Briefs)
July 21, 2003... Byline: Frederick P. Gabriel Jr. Prince is taking over Citigroup Inc. No, not the pop star. We're talking about Charles "Chuck'' Prince, a 53-year-old lawyer named Wednesday to succeed Sanford I. Weill as Citigroup's chief executive at...

At the Bell.(Late News)
July 21, 2003... CFP Board panel to search for CEO * The 14-member governing board of the Certified Financial Planner Board of Standards Inc. in Denver voted Friday to form a search committee to find a replacement for CEO Louis Garday, who announced last...

This bank wants James in its gang.(News)
July 21, 2003... Byline: Rick Miller LeBron James has at least one option if he wants to keep his newfound riches close to home. Akron, Ohio-based FirstMerit Corp. announced last week it was changing the name of its private-banking business to...

'Industry Attitudes' survey on the way.(News)
July 28, 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...

Street debate: Active vs. passive; Smith Barney embraces use of ETFs in its separate accounts.(News)
July 28, 2003... Byline: Brooke Southall Smith Barney Inc. blinked, and it's opening some eyes on Wall Street. The stock brokerage subsidiary of Citigroup Inc. in New York is allowing a grass-roots movement from its own financial advisers to dictate...

ING playing hardball with ex-broker chief; Network alleges breach of non-compete pact.(News)
July 28, 2003... Byline: Bruce Kelly The rancor between ING Advisors Network Inc. and a former top executive is rising. At issue is one of the stickiest issues in the brokerage industry: How and when can a former manager woo brokers to his new firm?...

At the Bell.(Late News)
July 28, 2003... Lehman may sell Neuberger clearing * One possible outcome of Lehman Brothers Holdings Inc.'s purchase of Neuberger Berman Inc. is the sale of Neuberger's clearing business, say executives and consultants familiar with the two New York...

Taking Sides: Investors need to shoulder their share of the blame.(Opinion)
July 28, 2003... Judge Milton Pollack's decision early this month rejecting investor lawsuits against Merrill Lynch & Co. Inc. and former star analyst Henry Blodget over the tech bubble was a breath of fresh air. It's a reminder that a few Wall Street firms...

One on One: "The world has shifted to managed accounts right now".(News)
July 28, 2003... Byline: David Hoffman No company has been more successful at reeling in assets during the bond bull market than Pacific Investment Management Co. of Newport Beach, Calif. Through the first five months of the year, the $75.89 billion...

Mortgage/planning firm eyes new MDs, lawyers; `We want to be their debt managers'.(News)
July 28, 2003... Byline: Bruce Kelly One regional mortgage broker/ banker is taking a stab at financial planning, with the hope of wooing wealthy clients. East Bay Mortgage Inc. in Gig Harbor, Wash., says it views a mortgage as part of a financial...

Other Views: It's payout time, and value gets a boost; "The dividend yield on the Barra Value Index is substantially higher than that on the Barra Growth Index.''.(Opinion)
July 28, 2003... Byline: Andrew W. Bischel Some would have you believe that a change in the relative taxation of dividends and capital gains has no impact on the relative attraction of growth versus value ["The cut in dividend taxes really isn't a...

Street Wise: Fund's assets surge as it courts smaller players.(The Markets)
July 28, 2003... Byline: Jeff Benjamin Retail distribution is proving to be a bonanza for Gardner Lewis Asset Management LP, as well as an attractive opportunity for financial advisers. Until this past April, the Chadds Ford, Pa.-based boutique asset...

Little-known Icap fund bags big returns; Select Equity near top in large-cap-value.(News)
July 28, 2003... Byline: David Hoffman It's a top-performing mutual fund, but few financial advisers know about it. The $51 million Icap Select Equity Fund, offered by Institutional Capital Corp. in Chicago, is currently among the top-performing...

Reverse Spin: The urge to merge is emerging anew.(Briefs)
July 28, 2003... And they're off! In what is likely to be the start of a rush of merger-and-acquisition activity involving asset managers in the months ahead, Lehman Brothers Holdings Inc. on Tuesday said it would buy Neuberger Berman Inc. for $2.63...

Fast Track: A man on a (governance) mission.(News)
July 28, 2003... Byline: Bruce Kelly James Kaplan took a look at last year's corporate-governance scandals and felt he had to do something. So he decided to create a new system to analyze the vast amount of accounting and corporate-governance data on...

Monday Morning: How come nobody informed me?(News)
July 28, 2003... Byline: Jim Pavia A recent report by the National Bureau of Economic Research says the recession that began in March 2001 actually lasted just eight months. I wonder if anyone besides me finds this revelation a little perplexing....

Plans are hot item, if you have the goods; Finding savvy advisers no cinch, insurers find.(News)
July 28, 2003... Byline: Jeff Benjamin Selling retirement plans is becoming one of the hottest opportunities for financial advisers. Of course, it requires a skill set that is different from what it takes to service individual investors, and it's not...

At Issue; Joe Six-pack needs firm stressing advice, not product.(Letters)
July 28, 2003... In reference to your contention [Monday Morning, July 14] that average Americans need financial planners, I agree, and I think the answer is that we need more firms that work strictly on an hourly basis dispensing advice, not products. ...

Suffer in silence? Not these funds; Managers go public with complaints.(News)
July 28, 2003... Byline: David Hoffman Money managers generally are reluctant to knock the companies in which they invest, but Tweedy Browne Co. LLC in New York and a handful of other money managers are breaking the mold. Tweedy Browne is embroiled in...

Ads touting short-term performance have returned; As funds rise, so does the hype.(News)
July 28, 2003... Byline: Frederick P. Gabriel Jr. For an industry that's constantly harping on investing for the long-term, mutual fund companies are wasting little time getting back to hyping the short-term performance of their funds. In recent weeks,...

Rep. Baker adds amendment containing provision; House bill would require brokers to disclose fees for classes of funds.(News)
July 28, 2003... Byline: Sara Hansard Brokers would have to tell their clients how much they are paid to sell a fund or a particular class of fund shares under legislation voted out of committee last Wednesday. An amendment to that end, offered by...

Datebook.(Calendar/Datebook)
July 28, 2003... JULY 31-Aug. 1 - Third annual College Savings Plan Summit, Financial Research Associates LLC. Hilton Boston Back Bay. (800) 280-8440 or frallc.com. AUGUST 3-8 - 2003 Financial Analysts Seminar, Association for Investment...

Say newsletter, run by CFA-in-training, lacks benefits of fund investing; TheStreet.con? Experts call `safe' plan out.(News)
July 28, 2003... Byline: David Hoffman Putting your investments in dividend-yielding stocks and municipal-bond funds may be less risky than investing in go-go growth stocks and junk-bond funds, but it's still risky. That's the consensus of many...

For fund managers, it's not time to leave; Most are choosing to stay put for now.(News)
July 28, 2003... Byline: Frederick P. Gabriel Jr. While some mutual fund companies have recently bled high-profile fund managers, most such managers are intent on staying put at their current jobs, at least for now. By and large, neither the current...

Short Interests: If your bottom line is ailing, just blame it on SARS.(News)
July 28, 2003... Byline: Jeff Benjamin, Julie Sinha and Sara Hansard Severe acute respiratory syndrome has emerged as the latest go-to cause for poor performance by public companies. According to a recent analysis by eRaider.com Inc., a New York-based...

75-year relationship coming to an end; College cuts ties with financial services society.(News)
July 28, 2003... Byline: Sara Hansard The American College is severing its relationship with the professional organization it spawned 75 years ago. In June, the executive committee of the Bryn Mawr, Pa., college quietly decided to create its own alumni...

Tax Watch: Court lets sun shine on tax shelter investors.(News)
July 28, 2003... Byline: Mark Battersby A U.S. District Court in North Carolina recently denied injunctive relief to tax shelter investors seeking to prevent a bank from turning over investor lists. The court ruled that the law firm that promoted the...

Moving Up.(News)
July 28, 2003... * AXA Financial Inc. in New York has promoted Stacy Braun, 38, and Gregory Winsper, 38, to senior vice presidents, from vice presidents. Ms. Braun will be responsible for marketing proprietary products and services, and developing AXA...