Investment News articles from June 2009

Investment News archives from June 2009

Affluent households ignore 529 plans, study says; Despite tax breaks, report says the market is under-penetrated.(NEWS)
June 15, 2009... Byline: Charles Paikert Two-thirds of affluent parents with children under 18 aren't using Section 529 college savings plans, according to a report by The Phoenix Cos. Inc. "Clearly, the high-net-worth market is under-penetrated when...

BlackRock poised to grab No. 1 spot; Deal to buy BGI catapults firm to top with $2.7T in assets.(NEWS)
June 15, 2009... Byline: Mark Bruno Make way for the 1,600-pound gorilla in the money management industry. BlackRock Global Investors scheduled to emerge in the fourth quarter from the mega-marriage of BlackRock Inc. and Barclays Global Investors...

At the Bell.(NEWS)
June 15, 2009... The Hartford says yes to TARP funds The Hartford (Conn.) Financial Services Group Inc. said Friday that it will participate in the Department of the Treasury's Capital Purchase Program, which is part of the Troubled Asset Relief Program....

NAPFA copes as members are charged; SEC, other regulators, allege kickbacks, theft of client assets.(NEWS)
June 15, 2009... Byline: Bruce Kelly The high-minded, fee-only advisers who lead the National Association of Personal Financial Advisors last week told its members that they are struggling to come to terms with allegations that three NAPFA advisers,...

Finra suitability proposal raises hackles of those in the fixed-annuities industry; The regulator seeks comments, but some critics are already saying it is overstepping its bounds.(NEWS)
June 15, 2009... Byline: Darla Mercado The Financial Industry Regulatory Authority Inc.'s proposal to widen its purview to include non-securities products has left some in the fixed-annuities industry gnashing their teeth. Finra is seeking comments on...

Head winds aside, family offices are bullish; Most expect solid growth over next six months.(NEWS)
June 15, 2009... Byline: Charles Paikert Multifamily offices are expecting robust growth in the next six months, despite the continued financial paralysis of many wealthy clients. San Francisco-based Aspiriant LLC, which manages $4.1 billion, expects...

Former chief executive sues First Allied; Keith Gregg claims improper practices; firm says all accusations are false.(NEWS)
June 15, 2009... Byline: Dan Jamieson Keith Gregg, former president and chief executive of First Allied Securities Inc. of San Diego, is suing the firm, claiming that he was forced out after complaining about improper practices at the company. Officials at...

Firms in niche segments seek wider client base; Even so, sticking close to target marketworks best, according to experts.(NEWS)
June 15, 2009... Byline: Lisa Shidler Add target marketing to the list of advisory firm best practices being rethought in light of the recession and market slump. Although relatively few advisory firms concentrate on clearly defined niches a practice...

Pershing urges brokers to embrace RIA model; Clearing firm shops AIG to its clients.(NEWS)
June 15, 2009... Byline: Jed Horowitz Executives of Pershing, the largest provider of clearing services to broker-dealers, spent much of their energy at the firm's annual Insite conference trying to persuade clients to open their brokerage doors to...

Two cheers for automatic IRA enrollment.(NEWS)
June 15, 2009... SOMETHING MUST BE DONE to encourage employees of small companies to save for retirement. As many as 78 million such workers aren't saving for the future and ultimately will depend solely on Social Security for retirement income. Those...

Summer interns find few advisory jobs; Firms claim that they are too busy to spend time on training.(NEWS)
June 15, 2009... Byline: Lisa Shidler In an effort to cut costs and save time, many advisory firms are deciding to forgo hiring summer interns this year. "Normally, we have more internships than we can handle, but this year, we're not seeing people...

Health reform debate overlooks long term care, Tom Daschle says; Former Senate majority leader isn't optimistic that changes will come this year.(NEWS)
June 15, 2009... Byline: Sara Hansard As Congress takes up health care reform, too little attention is being paid to long term care. That was the overall assessment of speakers participating in a forum in Washington last Monday on the future of health...

Brokerage firm recruitment deals are; Industry packages are down only slightly from their 2008 peak.(NEWS)
June 15, 2009... Byline: Dan Jamieson Despite the intense scrutiny on executive compensation by legislatures and regulators, major brokerage firms continue to offer generous recruitment packages to top brokers. Overall, industry packages for leading...

The creator of InvestmentNews has left the building.(NEWS)
June 15, 2009... When Bill Bisson called me into his office the week before last to say he was retiring after 34 years with the company, I said: "Good for you; bad for us. His name appears at the top of this newspaper's masthead, which is fitting because...

City National takes big stake in Lee Munder Capital; The deal advances parent's strategy of buying managers.(NEWS)
June 15, 2009... Byline: Jed Horowitz City National Corp., the bank holding company that owns Convergent Capital Management LLC, has agreed to buy a majority interest in Lee Munder Capital Group, a firm with more than $3 billion in assets under management....

Upcoming events.(NEWS)(Calendar)
June 15, 2009... June 16 Webcast series: Looking for yield Finding reasonable returns with relative safety can be a challenge. Three experts offer strategies for enhancing returns now through dividend-paying stocks, municipal bonds, corporate bonds and...

PEOPLE.(NEWS)
June 15, 2009... Investors Capital Corp. of Lynnfield, Mass., has promoted Robert Foney, 43, to chief marketing officer, from director of marketing and public relations. His new responsibilities include building and maintaining the Investors Capital brand,...

Investors yank cash from money market funds; They have pulled $200B out since the market rally began.(NEWS)
June 15, 2009... Byline: Mark Bruno Wary investors have been steadily moving assets out of safe but incredibly low-yielding money market mutual funds in significant numbers since the U.S. markets bounced off of their lows in early March. More than...

Changing regulations mean EIA compliance challenges; Annuity suitabilitya key issue, panelists at NAVA conference say.(NEWS)(Conference news)(Discussion)
June 15, 2009... Byline: Darla Mercado As new annuity rules continue to develop, chief compliance officers at broker-dealers say that they still face some challenges in implementing compliance procedures with their financial advisers. Regulatory...

Pershing asks advisers to pay surcharges for some funds; Although most funds absorb costs, some popular offerings pass them along.(NEWS)
June 15, 2009... Byline: Jed Horowitz Pershing LLC, the largest provider of back-office services and financing to small and independent broker-dealers, this month began charging shareholder servicing fees to brokers and financial advisers who buy certain...

Arbitration settlement lands in insurer's lap; Unusual deal allows VSR Financialto shift $10.3M claim.(NEWS)
June 15, 2009... Byline: Bruce Kelly A sprawling case of alleged securities fraud involving an independent broker-dealer and two brokers may wind up costing an insurance company $10.3 million. VSR Financial Services Inc., a broker-dealer in Overland...

Outlook dim for adviser SRO in financial-reform proposal; White House focuses on measures that protect Main Street investors.(NEWS)
June 15, 2009... Byline: Sara Hansard The Obama administration's sweeping proposal to tighten financial regulation is unlikely to press for the formation of a self-regulatory organization to oversee investment advisers. The plan, to be unveiled...

Pershing plants trees.(NEWS)
June 15, 2009... Byline: Evan Cooper Critics may contend that a lot of Wall Street's output is hot air. Still, in terms of its actual environmental impact, the financial business is pretty clean and Pershing LLC wants to make it even cleaner. ...

Ex-NAPFA exec allegedly took $1.24M in kickbacks; The charges leave members "saddened' and "frustrated'.(NEWS)
June 15, 2009... Byline: Bruce Kelly Advisers who are members of NAPFA had a range of thoughts and reactions to the news that the SEC last month charged a past president of the organization with taking kickbacks related to unregistered investment pools his...

Rydex SGI aims to refocus on asset management; Firm finalizing saleof broker-dealer unitin rebranding effort.(NEWS)
June 15, 2009... Byline: David Hoffman Rydex Investments, now Rydex SGI, is repositioning itself to focus on an expanded set of asset management capabilities. That is the idea behind the rebranding of the firm, the result of a merger last month between...

Financial advisers sing the praises of account aggregation services; Despite set-up glitches, most find the technology boosts productivity.(NEWS)
June 15, 2009... Byline: Davis D. Janowski When introduced about a decade ago, account aggregation was touted as a major adviser solution. The promise was that it would provide a holistic view of all a client's assets, no matter where they were held,...

Difficult times spark a shift to budget booze.(NEWS)
June 15, 2009... Byline: Dan Jamieson The "liquor indicator is showing that consumers are still worried about losing their jobs. When times get tough, consumers tend to shift to lower-cost booze, said Charles Norton, portfolio manager of USA Mutuals...

Big fund firms such as BlackRock, Pimco seen on short list for PPIP; But red tape may lead some managers to opt out, observers say.(NEWS)
June 15, 2009... Byline: David Hoffman BlackRock Inc., Franklin Templeton Investments, Invesco Ltd., Pacific Investment Management Co. LLC and Western Asset Management Co. are among the leading candidates whose selection may come as early as this week to...

Correction.(Correction notice)
June 15, 2009... JGW Holdco LLC and affiliates J.G. Wentworth LLC and J.G. Wentworth Inc., all of Bryn Mawr, Pa., emerged from bankruptcy protection June 1. The information was incorrectly reported in the article "Life settlement firms that hit skids could hurt...

Clarification.(Correction notice)
June 15, 2009... An article that first appeared on InvestmentNews.com on June 7, "SEC charges former president of NAPFA and his firm of taking $1.24 million in kickbacks," said that James Putman, the founder and majority owner of Wealth Management LLC of Town...

Opinion poll.
June 15, 2009... This week's question: Should the Obama administration push for the formation of a self-regulatory organization to oversee investment advisers? Vote now! investmentnews.com/poll Previously, we asked you: Do you think that...

Physicians' association enlists NAPFA to create advisers' network.
June 15, 2009... The Chicago-based MD Preferred Service Network, which represents more than 831,000 physicians, is entering into an alliance with the National Association of Personal Financial Advisors to create the MD Preferred Financial Advisor Network....

Top web stories viewed June 5-12.
June 15, 2009... 1SEC charges former president of NAPFA and his firm with taking $2.48M in kickbacks James Putman and a colleague allegedly took kickbacks related to unregistered investment pools that their firm managed. 2Adviser allegedly stole $6M...

on InvestmentNews.com.
June 15, 2009... A time for value: After market bottoms, value stocks tend to out perform growth stocks. In Investment Insights, senior editor Jeff Benjamin looks into the track record of these style categories with John Buckingham of Al Frank Asset Management...

Technology helps deaf adviser expand practice; Videoconferencing allows Louis Schwarz's Washington-area advisory firm to serve deaf clients face to face.(News)
June 29, 2009... Byline: Lisa Shidler Louis Schwarz responds to his clients' concerns even though he can't hear what they are saying. Mr. Schwarz, who is deaf, has been a financial adviser for 26 years and works with many deaf and hard-of-hearing...

Ameriprise set to buy another asset manager or broker; Company could spend more than $1 billion on an acquisition.(News)
June 29, 2009... Byline: Bruce Kelly Fresh from completing a $900 million offering of common stock, Ameriprise Financial Inc. is well-positioned to buy another asset management company or broker-dealer. In fact, Ameriprise of Minneapolis is aiming for...

Asset-based LTC insurance attracts buyers; But some advisers express concern about the products' limits.(News)
June 29, 2009... Byline: Darla Mercado Although financial advisers have been leery of life insurance with long term care benefits, the products appear to be generating interest among consumers trying to insure against multiple risks and search for a place...

Wealth managers must improve business model to retain clients, report says; High-net-worth investors lack confidence in their advisers' ability to manage risk.(News)
June 29, 2009... Byline: Charles Paikert In an effort to retain assets and regain the confidence of high-net-worth clients, wealth managers must find ways to improve their overall business model, according to a new report. The financial crisis resulted...

Breakaway brokers still a trickle, not a tide; Wirehouse exodus expected to pick up over the next 18 months.(News)
June 29, 2009... Byline: Jed Horowitz Even though independence is losing its stigma as a sign of failure among wirehouse brokers, they continue to move at only a moderate pace to independent broker-dealers and registered investment advisory firms, a panel...

McCool says solution near on custody of alternatives.(News)
June 29, 2009... Byline: Jed Horowitz The Charles Schwab Corp., which promised to spell out details of its plan to help advisers move alternative assets from its platform this month, has nearly met its deadline. The San Francisco-based firm is in the...

Upcoming events.(News)
June 29, 2009... July 14 Webcast series: Using social media to market your practice Blogging, LinkedIn, YouTube, Facebook, Twitter, Ning and Digg: These social-networking tools aren't just for teenagers anymore. More and more advisers are using them...

Battered equity boutiques broaden focus to bonds; Hotchkis, Driehaus add credit strategies; Third Ave. eyes junk.(News)
June 29, 2009... Byline: Douglas Appell Some well-known equity boutiques have begun offering bond strategies this year, diversifying their portfolios after the market collapse focused attention on the ability of money management companies to cope with...

Managers desperate for big infusions of cash; Refinancing debt, raising capital tops on minds of firms.(News)
June 29, 2009... Byline: Arleen Jacobius Real estate managers are making a mad scramble to raise cash. Their two top priorities this year are refinancing maturing debt and raising capital, according to a recent survey of more than 40 real estate money...

SEC doesn't need a defibrillator after all; Administration would give it more clout, boost funding by 7%.(News)
June 29, 2009... Byline: Sara Hansard At the beginning of the year, after it missed cues for seemingly everything from the massive Madoff Ponzi scheme to the credit crisis, the Securities and Exchange Commission was being written off as all but dead. ...

At the Bell.(News)
June 29, 2009... Wealthy with advisersoutdid those without Millionaires who worked with financial advisers saw investible assets decline by an average of 4% last year, compared with 18% for those without an adviser, according to a survey of 1,000...

Lax compliance can be costly, warn experts; Cutbacks, procedural gaps leave many advisers vulnerable to fines far greater than any savings.(News)
June 29, 2009... Byline: Lisa Shidler In their efforts to cut costs, advisers may be setting themselves up for some big expenses. "Firms are exposing themselves to sizable financial losses as a result of compliance failures, said Sharie Brown, a...

Equity issues hitting market at record pace; But returns historically dip following jump in issuance.(News)
June 29, 2009... Byline: Jeff Benjamin Record levels of stock issuance by public companies over the past several weeks could come back to haunt the market and hurt investors, at least in the near term. While the market rally from the March 9 low has...

Big fraud cases put focus on disclosure; Suits and probes involving broker-dealers go undisclosed while reps face full exposure.(News)
June 29, 2009... Byline: Dan Jamieson The Stanford and Madoff fraud cases have put the brokerage industry's disclosure system under the spotlight. News reports have uncovered the fact that regulators had looked into activities at the Houston-based...

Sorry, my adviser istied up at the moment.(News)
June 29, 2009... Byline: Jeff Benjamin Lousy investment performance apparently drove four clients of a financial adviser in Speyer, Germany, to kidnap and torture him for four days this month, according to published reports. James Amburn, 56, told the...

Some advisers question future of LPL unit; Worries abound that Mutual Service will dump Pershing platform.(News)
June 29, 2009... Byline: Bruce Kelly Tensions have been building for months among financial advisers affiliated with Mutual Service Corp., a subsidiary broker-dealer of LPL Investment Holdings Inc., as they wonder about the future of their firm. A big...

Schwab to waive fees for its RIAs' new clients; Move could trigger a price war among custodian rivals.(News)
June 29, 2009... Byline: Jed Horowitz The Charles Schwab Corp. is dipping into its deep pockets to help independent advisers capture business from full-service brokers. At its Explore conference for top registered investment adviser clients last week,...

Bill would give indie advisers sole right to offer 401(k) advice; Banning reps would shrink pool of available advisers, critics warn.(News)
June 29, 2009... Byline: Mark Bruno After focusing their efforts on increasing 401(k) fee disclosure, members of an influential committee last week approved a more comprehensive package of potential retirement reforms. The House Committee on Education...

Knocking indexing.(News)
June 29, 2009... Byline: Sara Hansard Despite the widely held view that indexing is the safest way to invest, not everyone is a proponent. Indexing actually "helped recklessly drive our financial system and economy into the ditch last fall, said Scott...

We need financial cops - and speed limits.(News)
June 29, 2009... MARY SCHAPIRO, chairman of the Securities and Exchange Commission, is correct: Fiduciary standards for all who give investment advice won't be sufficient to deter fraud. High standards are never enough. Consider that every state and...

Advisers have cut back, study says; Many are doing more with less to retain clients.(News)
June 29, 2009... Byline: Lisa Shidler Financial advisers are facing tough times, with 40% having to cut back on support staff through layoffs or attrition, a soon-to-be-released report has found. The report, to be released at the end of July by...

Target date funds seen as a question of how rather than if; They must be aligned with the expectations of investors, experts say.(News)
June 29, 2009... Byline: Mark Bruno Target date funds are ripe for regulation a conclusion made abundantly clear at a joint Department of Labor and Securities and Exchange Commission hearing this month dissecting these popular retirement funds. But...

Webcast panelists.(News)(Discussion)
June 29, 2009... Ray Henderson Partner Business Health Propriety Ltd. Sydney, Australia Nancy Lininger Principal The Consortium Camarillo, Calif. Matt McGinness Principal Best Practice Research San Diego,...

MSRB readies new muni disclosure system; Few expect the effort, set to go live next month, to be panacea.(News)
June 29, 2009... Byline: Dan Jamieson The Municipal Securities Rulemaking Board's revamped municipal-bond disclosure system, set to go live next month, won't be quite the panacea for disclosure that regulators hope, according to some observers. Once...

529 plans tap third-party consultants; Many seek guidance to monitor programs in wake of down market.(News)
June 29, 2009... Byline: Charles Paikert States that operate Section 529 college savings plans are showing an increased interest in hiring third-party investment consultants to monitor their programs in the wake of the stock market downturn and the poor...

Insurance-affiliated brokers face major changes under Obama plan; Fiduciary requirement could force them to choose advice or transactions.(News)
June 29, 2009... Byline: Darla Mercado Broker defections, a loss of market share and spinoffs could be on the horizon for insurance-affiliated broker-dealers if the Obama administration's proposed regulatory reforms force them to act as fiduciaries. ...

Correlation found between top-exec behavior and stock price; The Corporate Library uses four criteria to grade firms; AIG received an F in 2007.(News)
June 29, 2009... Byline: Jeff Benjamin There is nothing quite like hard numbers when it comes to holding a corporate executive's feet to the fire. And short-term aberrations notwithstanding, there are apparently some direct and measurable correlations...

Happy about health care.(News)
June 29, 2009... Byline: Darla Mercado Although most Americans are less than thrilled about the state of the U.S. health care system, the majority appear to be happy with their own health care coverage, according to a survey from the Employee Benefit...

PRACTICAL MAGIC: WAYS TO CUTCOSTS AND EARN MORE; Savings can be found in staff incentives, using cheaper or free technology and working smarter.(News)
June 29, 2009... The following edited transcript is from InvestmentNews' June 9 webcast, "50 Cost-Saving and Money-Making Ideas in 50 Minutes. Deputy editor Evan Cooper and reporter Lisa Shidler moderated. InvestmentNews: We've decided to do something...

Advisers, investors call for reinstating uptick rule; Brokerage industry deems it unnecessary, but would live with modified regulation of short sales.(News)
June 29, 2009... Byline: Sara Hansard Highlighting investor concern about the market effects of short selling, more than 3,000 comments have been filed with the Securities and Exchange Commission on proposed changes to the short-sale rule. A majority...

Top web stories viewed June 19-26.
June 29, 2009... 1House committee approves bill restricting 401(k) advice to indie advisers A provision that would permit only independent financial advisers to counsel 401(k) participants on their investment decisions is part of a comprehensive retirement...

Bernanke says he didn't bully BofA to buy Merrill.
June 29, 2009... Federal Reserve Chairman Ben Bernanke told Congress that he didn't pressure Bank of America into acquiring Merrill Lynch in a deal that ultimately cost taxpayers $20 billion. investmentnews.com/bernanke