Investment News articles from July 2007

Investment News archives from July 2007

Closing quote.(Reverse Spin)
July 9, 2007... "If you... have competent people in charge... you sit there as the highest-paid person in the company and do nothing. So [CEOs try to] acquire or diversify or do [other] big things.'' -Ben Edwards III, former chairman of A.G. Edwards Inc., on...

Mother-daughter firm finds its sweet spot; Unprofitable clients are `fired' - or made profitable.(News)
July 9, 2007... Byline: Gary S. Mogel NEW YORK - Cynthia Keithley, principal of Keithley Investment Group LLC, goes to almost any length to serve her small-fry clients. But as a financial advisory business grows, the ability to say "no'' can be the...

Be wary of retirees' risk, says a software maker; Advisers should look beyond client assets and investment income.(News)
July 9, 2007... Byline: Darla Mercado NEW YORK - Advisers may want to think twice before loading a new retiree's portfolio with equity investments, according to a retirement software developer. Charles S. Yanikoski, president of Still River Retirement...

Working with the media.(Editorial)
July 9, 2007... Advisers seeking to raise their visibility through publicity are invited to take part in a live webcast, "How to Work with the Media.'' To be held Wednesday, July 11, from 3-4 p.m. ET, the webcast will include panelists Karen Altfest, vice...

Credit card has luxury perks.(Short Interests)
July 9, 2007... Byline: Gary S. Mogel NEW YORK - A new credit card is part concierge, part travel agent, part charitable foundation. Bank of America Corp. started issuing the card - called Express Accolades - this month, according to a company...

Brookstreet clients, counting losses, ponder arbitrations; The firm's 500 indie-contractor reps have scattered.(News)
July 9, 2007... Byline: Bruce Kelly NEW YORK - The collapse of Brookstreet Securities Corp. last month is likely to spawn dozens of arbitration claims from investors facing losses that, in some cases, run into the millions, according to one plaintiff's...

It's clearly time to tackle the AMT.(Editorial)
July 9, 2007... Now that the Senate has disposed of the immigration reform bill, perhaps it and the House of Representatives can turn their attention to a matter at least as serious: reform or repeal of the alternative minimum tax - preferably repeal. The...

Sale of Rydex to insurer: They love it, they hate it; Advisers see positives and negatives in deal.(News)
July 9, 2007... Byline: Charles Paikert NEW YORK - Advisers are reacting to the impending sale of Rydex Investments to the Security Benefit Group of Companies with a mixture of enthusiasm, caution and disapproval. "It's a strategic acquisition that...

Suscribers get discount on FPA's scorecard.(News)
July 9, 2007... Byline: Evan Cooper NEW YORK - The FPA Practice Management Scorecard is now available to subscribers of InvestmentNews at $195, a discount of more than 20% from the regular price of $245. The score card is a comprehensive set of...

Lawyers see more suits with dually registered reps; Clients may not be clear about what to expect from such professionals.(News)
July 9, 2007... Byline: Darla Mercado NEW YORK - Dual broker-adviser registration may become more common as brokerage firms shift from fee-based brokerage accounts, but the adviser's new role could lead to more litigation, according to lawyers. The...

Multifamily offices rethink their pricing; Charging flat fees is seen as an emerging trend.(News)
July 9, 2007... Byline: Charles Paikert NEW YORK - Pressed by very wealthy clients who feel they are overpaying, and under cost pressures of their own, multifamily offices increasingly are searching for alternatives to asset-based fees, according to...

Barclays Bank exchange traded notes gather $2.6B; Some advisers still question the appeal, future of ETNs.(News)
July 9, 2007... Byline: David Hoffman PHILADELPHIA - Although iPath exchange traded notes have amassed more than $2.6 billion since making their debut more than a year ago, their appeal remains a mystery to some industry experts. "I kind of sit back,...

Opinion poll.
July 9, 2007... Previously, we asked you: Should brokers who have been banned from the industry be required to report annually their business activities to some oversight body? Yes: 74.9% No: 25.1% Respondents: 235 This week's question is:...

Shareholders always come first.(Monday Morning)
July 9, 2007... Byline: Dan Jamieson You almost could hear the groans at A.G. Edwards & Sons Inc. when Wachovia Corp. chief executive G. Kennedy Thompson told analysts during a conference call that he expects to excise $650 million in expenses from the...

At the bell.
July 9, 2007... Goldman Sachs reports death threats The Goldman Sachs Group Inc. said Friday that the FBI is investigating letters sent to nine newspapers nationwide threatening "hundreds'' of the New York investment bank's employees with death. The...

Remaining regional firms say, 'We're not for sale'; Client-first culture, not greater size, produces best results, brokerage execs contend.(News)
July 9, 2007... Byline: Dan Jamieson IRVINE, Calif. - As the number of regional brokerage firms dwindles, executives at those that remain insist they're better off staying independent. "We have no intention of being sold,'' said William Johnstone,...

Alternatives IPO bandwagon is rolling.(Reverse Spin)
July 9, 2007... Byline: Charles Paikert Possible tax hikes and stagnant stock price movement aside, hedge funds and private-equity funds continue to beat a path to the public markets. Last week, New York-based Kohlberg Kravis Roberts & Co. became the...

Mergers of advisers and benefit firms seen as a natural fit; Lenox Advisors, Murphy Todd combine in order to hone investment synergies.(News)
July 9, 2007... Byline: Gary S. Mogel NEW YORK - Mergers between employee benefit and financial advisory firms may become common as they set their combined sights on baby boomers' retirement assets, according to industry observers. Such mergers make...

Trading costs have predictive power; Transaction costs weigh heavily in mutual fund performance, study concludes.(News)
July 9, 2007... Byline: Kathie O'Donnell BOSTON - Forget expense ratios. Portfolio trading costs can be an even bigger drag on mutual fund performance. On average, U.S. stock funds spent $1.44 per $100 of assets on trading costs, compared with $1.21...

12(b)-1 fees come under attack again; Consumer advocates question their use in fee-based accounts.(News)
July 9, 2007... Byline: Sara Hansard WASHINGTON - On the heels of the federal appeals court decision rejecting fee-based brokerage accounts, brokers are facing yet another challenge from consumer advocates who are questioning whether 12(b)-1 fees are...

Panel to help firm attract rich women.(Short Interests)
July 9, 2007... Byline: Charles Paikert NEW YORK - Carl Domino Inc. has formed an advisory board to help the firm attract high-net-worth women. Formed as part of a target marketing strategy, the women's financial services advisory board will "help us...

Retirement has some in a panic.(Short Interests)
July 9, 2007... Byline: Lisa Shidler CHICAGO - Most investors feel prepared for retirement, but a significant number are antsy, nervous and worse, according to a survey conducted by the Securities Industry and Financial Markets Association of New York and...

Advisers to American Beacon share a philosophy.(Street Wise)
July 9, 2007... Byline: Jeff Benjamin The first priority behind the management of the American Beacon Mid Cap Value Fund (AACIX) is to build solid relationships with subadvisers that share a core value investing philosophy with American Beacon Advisors...

Vanguard's fund inflows top rivals' in first five months; Fidelity, American trail as index funds, ETFs score big.(News)
July 9, 2007... Byline: Kathie O'Donnell BOSTON - Fidelity Investments and American Funds lagged behind The Vanguard Group Inc. in stock and bond mutual fund sales for this year through May as investor appetite for low-cost index and exchange traded funds...

With Don Schreiber Jr. of WBI Investments.(One on One)
July 9, 2007... Byline: Jeff Benjamin Don Schreiber Jr. believes he has found a sweet spot in the financial services industry: helping retiring baby boomers make their money last longer. Toward that end, the 52-year-old founder and chief executive of...

Clutter a 'health hazard'.(Short Interests)
July 9, 2007... Byline: Lisa Shidler CHICAGO - Some investors don't even realize it's a problem. Others, who at least notice that shopping bags full of 15-year-old credit card receipts are overtaking their closets, consider it a harmless vice. ...

SEC panel to scrutinize financial reporting; Plans to focus on high number of restatements.(News)
July 9, 2007... Byline: Sara Hansard WASHINGTON - The Securities and Exchange Commission is setting up an advisory committee on financial reporting to scrutinize the high number of financial restatements by public companies, according to Robert Pozen, who...

As the UMA evolves, a clear definition is needed.(Investment Strategies)
July 9, 2007... Byline: Thomas Sholes The current state of the unified managed account can be summed up as follows: * It is a powerful concept. * Virtually every major separate-account sponsor today claims to offer a UMA. * All that is...

A tutorial on creating a 'raving' marketing plan.(Marketing Strategies)
July 9, 2007... Byline: Libby Dubick Successful marketing programs don't exist in a vacuum. This hit home when a financial adviser recently asked if I had a program to improve his client communications. When I asked what he wanted to accomplish, he...

Time for federal oversight of life insurers is now.(Other Views)
July 9, 2007... Byline: Jon A. Boscia Since birth, baby boomers have influenced business and government more than any prior generation. As infants, they redefined the baby food industry. As adolescents, they required new school buildings and...

End mandatory arbitration for investors.(Other Views)
July 9, 2007... Byline: Andrew Stoltmann Congress and the Securities and Exchange Commission have an unprecedented opportunity to strengthen the protections for U.S. investors. Specifically, Congress is contemplating prohibiting mandatory, binding...

Sudan-free ETF offered.(Short Interests)
July 9, 2007... Byline: Darla Mercado NEW YORK - Claymore Securities Inc. of Lisle, Ill., has launched the Claymore/KLD Sudan Free Large-Cap Core ETF, the first exchange traded fund based on a Sudan-free index. Following the KLD Large Cap Sudan Free...

Ben Edwards blasts Wachovia merger.(News)
July 9, 2007... Byline: Dan Jamieson IRVINE, Calif. - Ben Edwards III, a former chief executive of A.G. Edwards Inc., is not happy about his family firm's merger with Wachovia Corp. Mr. Edwards, who retired in 2001, caused a stir at St. Louis-based...

The magic of exchange-traded notes: Tax deferral.(The Tax-Conscious Adviser)
July 9, 2007... Byline: Robert N. Gordon Exchange-traded notes are the newest wrinkle from Barclays, the main sponsor of exchange-traded funds. According to Barclays, its iPath ETNs were invented to allow investors to access difficult asset classes....

Index tracks hedge funds with minority owners.(Short Interests)
July 9, 2007... Byline: Aaron Siegel NEW YORK - Hedge Fund Research Inc., a Chicago-based research firm and publisher of alternative-investment information, has introduced a benchmark designed to reflect the performance of minority- and female-owned hedge...

The best insurance: Strong performance.(The Markets)
July 9, 2007... Byline: Jeff Tjornehoj Overall, investors in variable annuity funds (which combine a mutual fund investment with an insurance wrapper and which are among the most popular investment strategies) benefited from historically strong returns...

Retirement plans under scrutiny; Conflicts of interest pose enforcement challenges, GAO report says.(News)
July 9, 2007... Byline: Doug Halonen WASHINGTON - The Department of Labor and Rep. George Miller, D-Calif., are considering separate efforts to crack down on pension consultant conflicts of interests following a report by the Government Accountability...

CFA Institute faces trademark battle in India; Organization to make case before Delhi High Court next week.(News)
July 9, 2007... Byline: Jeff Benjamin DETROIT - A long-running trademark battle is threatening to derail the expansion of the CFA Institute in what has become one of the fastest-growing markets for financial planning professionals. On July 17, the CFA...

Awards to honor the spirit of giving.(News)
July 9, 2007... InvestmentNews, in association with the Invest in Others Charitable Foundation, is accepting nominations for the Community Leadership Awards. The awards will honor the philanthropic spirit of financial advisers and celebrate the charities...

Correction/Clarification.(Correction notice)
July 9, 2007... Correction In an article in the June 25 issue, "Suspicions are verified: Fidelity is tops in IRAs," Fidelity spokeswoman Deborah Pont was incorrectly quoted as saying the company's no-fee individual retirement accounts are attractive to...

Calling all indie-film fans.(Short Interests)
July 16, 2007... Byline: Darla Mercado NEW YORK - If you are looking for a place to invest a few thousand dollars, check out the movie biz. IndieVest Inc., a Los Angeles-based film-financing firm, is providing investors with the opportunity to jump...

Where there's no will, there is a way; Some advisers get creative to convince clients to draft the documents.(News)
July 16, 2007... Byline: Lisa Shidler CHICAGO - Financial advisers are crafting new strategies to convince clients to complete their wills and estate plans. Clients often put off writing wills, and though advisers don't actually draft the documents,...

Firm aims to make DB plans a product advisers can sell; Tax code changes, Pension Protection Act increase the appeal.(News)
July 16, 2007... Byline: Brooke Southall SAN FRANCISCO - A small company is betting that it can turn defined benefit plans into a mainstream product for financial advisers to sell. Dedicated Defined Benefit Services LLC in San Francisco bought the...

Ideas for providing cutting-edge service.(Monday Morning)
July 16, 2007... Byline: Evan Cooper Every financial adviser knows the key to success in the ultrahigh-net-worth market: Service, service, service. But after you have walked their dogs, bought them hedge funds and bailed their spoiled kids out of...

With Stephan Q. Cassaday of Cassaday & Co. Inc.(One on One)
July 16, 2007... Byline: Lisa Shidler Conventional wisdom holds that a 4% annual withdrawal rate during retirement is most prudent, but Stephan Q. Cassaday allows his clients to withdraw 6%, and in some cases 7%, of their assets each year during...

Confidence on finances unwarranted?(Short Interests)
July 16, 2007... Byline: Darla Mercado NEW YORK - Consumers who save feel confident enough about their financial health to think they can weather an economic storm, but they may not have much to be confident about, according to a survey. The good news...

Do Goliath-sized returns follow David-sized assets?(The Markets)
July 16, 2007... Byline: Jeff Tjornehoj Among the never-ending debate topics engrossing the fund industry (active versus index funds, load versus no-load funds), the idea that smaller funds should outperform larger ones is one of the most persistent. ...

Rank and file owed corner office perks.(Short Interests)
July 16, 2007... Byline: Sara Hansard WASHINGTON - Any company that offers non-qualified deferred-compensation plans would have to provide defined benefit pensions to all employees under legislation introduced late last month by Sen. Tom Harkin, D-Iowa....

'Sicko' hits home with one adviser.(Short Interests)
July 16, 2007... Byline: Aaron Siegel NEW YORK - After taking jabs at big business, globalization, gun control and the Bush administration, controversial left-leaning filmmaker Michael Moore is addressing an issue that hits home with financial advisers:...

SEC must tread carefully with 12(b)-1s.(Editorials)
July 16, 2007... As the Securities and Exchange Commission considers what changes, if any, should be made to the rule allowing 12(b)-1 fees, it should keep in mind medicine's golden rule: First, do no harm. The SEC should be careful that any change it makes...

Some advisers eagerly await SEC's OK of muni ETF; Expense ratio seen as key to its success.(News)
July 16, 2007... Byline: David Hoffman PHILADELPHIA - An exchange traded fund that invests in municipal bonds is expected finally to become a reality - a prospect that excites some financial advisers. Barclays Global Investors of San Francisco has...

Reining in inflation fears is key.(Editorials)
July 16, 2007... Federal Reserve Board Chairman Ben Bernanke, in a speech in Cambridge, Mass., last week, said that as long as inflation expectations remain steady, the inflation rate itself should also hold steady in the face of volatile energy and food...

EIA suits' separate fates show specificity is key; Class status denied in Midland case, upheld on Allianz.(News)
July 16, 2007... Byline: Gary S. Mogel NEW YORK - Two legal decisions this month related to equity index annuities make clear that plaintiffs must attack specific annuity provisions or standardized marketing materials in order to show the "commonality''...

Closing quote.(Reverse Spin)
July 16, 2007... "It's a great problem to have for a short time. We've had it for a long time.'' -Joan Cohen, president of H&R Block Financial Advisors Inc., saying that the parent company's tax preparers generate 500,000 leads annually, the abundance of which...

At the bell.
July 16, 2007... 529 industry veteran Joins TIAA-CREF Martin Noven, a prominent state official and veteran of the Section 529 college savings plan industry, will join TIAA-CREF today in the New York-based company's Chicago office as regional vice president...

Dispute over broker-dealer cash erupts.(News)
July 16, 2007... Byline: Dan Jamieson SEC proposal on reserve funds comes under attack IRVINE, Calif. - An SEC proposal to change how broker-dealers can invest customer reserve funds has come under attack from a variety of industry interests. The...

Targeting wealth management; Bank of New York Mellon's first priority is building up its New York presence.(News)
July 16, 2007... Byline: Charles Paikert NEW YORK - The Bank of New York Mellon Corp. aims to be a wealth management powerhouse, and it is rolling up its sleeves to get there. "We definitely want to be a national brand, and I think we're a long way...

M&A activity on the rise among asset managers; Julius Baer unit, GAMCO seen as potential targets.(News)
July 16, 2007... Byline: David Hoffman PHILADELPHIA - An upsurge in mergers-and-acquisitions activity in the investment management industry is leading some market insiders to speculate that deals involving some well-known companies may be in the works. ...

Regulate public alternatives firms as funds, panelists say.(Conference Call)
July 16, 2007... Byline: Sara Hansard WASHINGTON - The Blackstone Group LP, the New York private-equity firm that underwent one of the largest initial public offerings in history last month, should be regulated as a mutual fund. That was the conclusion...

Proposed merger of Canadian regulators moving slowly; Designated CEO is appointed to head just one of the SROs.(News)
July 16, 2007... Byline: David Clarke OTTAWA - Talks about the proposed merger between two Toronto-based securities industry self-regulating organizations are hiccupping along. The idea of merging the Investment Dealers Association of Canada and Market...

Private-equity tax debate heats up.(Reverse Spin)
July 16, 2007... Byline: Charles Paikert Democratic presidential candidate John Edwards and billionaire buyout king Henry Kravis last week staked out dramatically opposing positions in the growing debate about how to tax managers of hedge funds and...

Opinion poll.
July 16, 2007... Previously, we asked you: Are you experiencing "iPhone envy''? No: 74% Yes: 19% I've already got one: 4% What's an iPhone? 4% Resondents: 213 This week's question is: What factor is most likely to derail the rally...

Lincoln's departing CEO nixes analyst speculation; Possibility of company's being sold didn't hasten his retirement, Boscia says.(News)
July 16, 2007... Byline: Gary S. Mogel NEW YORK - Jon A. Boscia's retirement announcement this month has nothing to do with the company's merger prospects or its financial performance, according to the chief executive and chairman of Lincoln Financial...

Firm helps invest in China.(Short Interests)
July 16, 2007... Byline: Gary S. Mogel NEW YORK - An advisory firm launched this month makes it easier to invest in China. ThinkTrust Capital Management LLC helps investors buy stock in Chinese companies such as search engine Baidu.com Inc. and China...

Rich often neglect personal-lines insurance, experts say; Special coverage needed for servants, art, yachts to reduce risk exposure.(News)
July 16, 2007... Byline: Gary S. Mogel NEW YORK - The rich are different, and so are their insurance needs, but many wealthy people may be leaving themselves unprotected, according to personal-lines-property-casualty-insurance specialists. "This is not...

SEC hits hedge fund regulatory hurdle; May have to rethink proposal to require wealth minimum.(News)
July 16, 2007... Byline: Sara Hansard WASHINGTON - A proposal to provide tougher qualification standards for investing in hedge funds and other alternative investments has proved to be so controversial that the Securities and Exchange Commission may have...

Serving the mass affluent retirement market.(Other Views)
July 16, 2007... Byline: Mark Elzweig and Nancy Miller Wall Street has a five hole in its retirement planning for aging baby boomers. For the most part, firms have focused their marketing efforts on the superrich - those with more than $2.5 million in...

Invest your client's stake in process, not sizzle.(Other Views)
July 16, 2007... Byline: William Berg This spring, the previously unthinkable happened: Toyota (Japan) Motor Corp. surpassed General Motors Corp. of Detroit as the world's biggest automobile manufacturer. When we read this, we couldn't remember any...

Black is the new red for ledger at H&R Block's broker unit; Firm hopes to keep the momentum going.(News)
July 16, 2007... Byline: Brooke Southall SAN FRANCISCO - After a long, hard slog, H&R Block Financial Advisors Inc. has found its way to profitability, and it expects to stay there, but its parent company's long-standing goal of turning millions of tax...

Third wife prevails over adult kids in estate suit; Texas case illustrates impact of remarriage on planning, some say.(News)
July 16, 2007... Byline: Lisa Shidler CHICAGO - In a case that married dry-as-dust estate-planning issues with "Dallas''-like squabbling among wealthy family members, a Texas court has decided that King Ranch heir B.K. Johnson had all his faculties when he...

SIFMA draws flak for Florida fee hikes; Didn't do enough to stop them, foes say.(News)
July 16, 2007... Byline: Dan Jamieson IRVINE, Calif. - Some brokerage firms are miffed about higher registration fees that Florida implemented this month, and blame the Securities Industry and Financial Markets Association for not doing enough to stop the...

Clarification.(Correction notice)
July 16, 2007... A June 25 story about registered representatives barred from the securities industry who were working as financial planners failed to give Kathy Nealon's full title. As well as being a certified public accountant, she is a non-producing...

Bear Stearns debacle forces hedge fund index to restate; CS/Tremont says late reporting caused abrupt shift.(News)
July 23, 2007... Byline: Bruce Kelly NEW YORK - The recent fallout in the market for subprime mortgages caused one prominent hedge fund index to revise some of its performance returns last week. Last Monday, the Credit Suisse/Tremont Hedge Fund Index...

SEC's effort to track ties to terrorism ruffles feathers; Website identifies companies linked to `rogue states'.(News)
July 23, 2007... Byline: Aaron Siegel NEW YORK - A new tool on the Securities and Exchange Commission's website that provides investors with a list of companies involved in countries designated as "state sponsors of terrorism'' is raising eyebrows among...

With Erin T. Botsford of The Botsford Group.(One on One)
July 23, 2007... Byline: Bruce Kelly Erin T. Botsford loves being at the center of her clients' financial well-being. And she considers identifying and attacking risk, not boosting the returns on a client's portfolio, the key to financial health. ...

Is it time to time the stock market? Five-year bull run worries many advisers.(News)
July 23, 2007... Byline: Jeff Benjamin DETROIT - With the Dow Jones Industrial Average closing above 14,000 for the first time last week, an increasing number of financial advisers are considering the merits of market timing. To be sure, the relative...

Suitability czar plan raises questions; But some say new C-level Allianz post isn't PR fluff.(News)
July 23, 2007... Byline: Gary S. Mogel NEW YORK - Is the creation of a top-level suitability monitoring job by Allianz Life Insurance Company of North America a step forward in annuity marketing or a defensive position in response to a battery of lawsuits?...

Advisers face fines from IRS on more kinds of returns; New law subjects preparers of estate, gift tax returns to stiff penalties, increases those involving income tax.(News)
July 23, 2007... Byline: Lisa Shidler CHICAGO - Financial advisers who prepare various tax-related documents for their clients will likely think twice before signing off on returns that include dubious or aggressive tax positions. A new law, enacted in...

DOL said to keep stable value off default option list; Expected to issue final regs next month.(News)
July 23, 2007... Byline: Sara Hansard WASHINGTON - The Department of Labor has rejected a proposal by the insurance industry to include stable-value funds as a default option for 401(k) plans, according to industry sources. The Labor Department on July...

Asset managers said to be overlooking Gen Y; Report highlights benefits of generation set to inherit boomers' wealth.(News)
July 23, 2007... Byline: Darla Mercado NEW YORK - Asset managers are raking in plenty of business from baby boomers but are missing the boat when it comes to boomers' children, according to a recent report from KPMG International. "The baby boomers...

Advisers want wholesaler tips, not trips; Strategies for building their businesses are preferred.(News)
July 23, 2007... Byline: Darla Mercado NEW YORK - Wholesalers seeking an adviser's good graces should forget the freebies and concentrate on developing solution-oriented consultative relationships. That's the recommendation of "Advisor Insight...

NYSE Euronext's Thain faces challenges; Competition may force another acquisition.(News)
July 23, 2007... Byline: Aaron Elstein NEW YORK - Life isn't fair. Just ask John Thain. Since becoming chief executive of the New York Stock Exchange in 2004, he has taken the former membership organization public, pushed it into bond and option...

Closing quote.(Reverse Spin)
July 23, 2007... "I adjust whenever I see happenings in the market. Buy and hold is not thinking.'' -Don Martin, president of Mayflower Capital in Los Altos, Calif., saying that reacting to market conditions is part of a financial adviser's fiduciary...

At the bell.
July 23, 2007... FPA names Barry Washington lobbyist The Financial Planning Association of Denver said Friday that it has hired a veteran to head up its lobbying efforts in Washington. Daniel J. Barry, a New York-based attorney described by the FPA as...