Investment News articles from March 2004

Investment News archives from March 2004

A move to internal hedging; VA writers aim to limit risk of living benefits.(News)
March 1, 2004... Byline: Rick Miller With the reinsurance market essentially dried up, major variable annuity writers are turning to other means to handle the market volatility that makes offering guarantees a risky business. A number of major...

OneSource is in eye of pay-to-play storm; Some advisers take steps to make clients aware of all fees.(News)
March 1, 2004... Byline: Brooke Southall Companies such as Charles Schwab & Co. Inc., Fidelity Investments and TD Waterhouse Group Inc., and the independent fee- only advisers that use their no- transaction-fee platforms, may be taking advantage of mutual...

One on One: "Some would describe our process as 'growth at a reasonable price'".(News)
March 1, 2004... Byline: David Hoffman With just $350 million in total assets spread among 12 mutual funds, the Mosaic Funds aren't exactly a household name. But the funds, offered by Madison (Wis.) Investment Advisors Inc., are starting to win a...

Retirement rule change may spur lawsuits; IRS could find 412(i) plans illegal.(News)
March 1, 2004... Byline: Sara Hansard One tax expert who follows insurance issues predicts that a recent ruling by the Department of the Treasury on 412(i) retirement plans will lead to many lawsuits against insurance companies and agents. "There are a...

High-end focus helped Fidelity end higher in 2003; Assets grew 19% in adviser unit.(News)
March 1, 2004... Byline: Frederick P. Gabriel Jr. Fidelity Investments, benefiting from an improved stock market and an effort to push sales through a select group of advisers, experienced a dramatic turnaround in fund flows in its adviser business in 2003....

Short Interests: A.G. Edwards highlights apple pie image in ads.(News)
March 1, 2004... Byline: Bruce Kelly, Sara Hansard and Rick Miller A.G. Edwards & Sons Inc., a St. Louis broker-dealer, is embarking on its first national advertising campaign, and many of its brokers welcome the move. "I think the timing on this is...

ICI just halfway there with disclosure push.(Opinion)
March 1, 2004... One discount-clothing chain in the Northeast has as its marketing slogan: "An educated consumer is our best customer.'' That is a slogan the Investment Company Institute of Washington and the mutual fund industry should adopt as they try to...

N.C. official: Who pays freight for ICI? Do shareholders foot most of the bill?(News)
March 1, 2004... Byline: David Hoffman If one state official has his way, mutual fund companies will have to disclose what portion of their Investment Company Institute dues is borne by fund shareholders. On Feb. 16, North Carolina's state treasurer,...

Universal set-asides may return; Portman, Cardin eye no-income-limit bill.(News)
March 1, 2004... Byline: Sara Hansard Two congressmen who wield enormous weight in the realm of retirement savings legislation may propose a bill that would abolish income limitations on contributions to individual retirement accounts. Reps. Rob...

Other Views: Scandal fallout leaves some `radioactive'; Execs who change fund firms can step on land mines; others are stuck at tainted companies.(Opinion)
March 1, 2004... Byline: Mark Elzweig & Nancy Miller The close of 2003 saw some heavy partying on Wall Street as the Dow Jones Industrial Average breached 10,000. But the mood was much more somber in the mutual fund industry, especially among innocent...

Reverse Spin - No treat for Fleet: SEC turns up heat.(Briefs)
March 1, 2004... Byline: Frederick P. Gabriel Jr. This is one game of hardball that FleetBoston Financial Corp. won't want to lose. On Tuesday, the Securities and Exchange Commission slapped the company's mutual fund unit, Columbia Management Advisors...

Industry challenges disparity in tax treament; 6 states weigh policies to treat plans equally.(529 Plans)
March 1, 2004... Byline: Rick Miller While Section 529 college savings plans continue to be hot sellers, industry leaders view the disparity in state tax treatment as a huge obstacle to future adviser-driven and direct sales. "While the growth [of the...

At the Bell.(Late News)
March 1, 2004... SEC polishes mutual fund rule * The Securities and Exchange Commission is readying its last piece of rulemaking in association with the mutual fund scandals, Cynthia Fornelli, deputy director of the SEC's division of enforcement, said...

Life-planning movement sustains split; One firm promotes `science of happiness'.(News)
March 1, 2004... Byline: Brooke Southall With Morgan Stanley and Merrill Lynch & Co. Inc. running television advertisements showing horseback rides and delivery rooms, the life-planning movement may soon be the new soul mate of financial planning. But a...

Taking Sides: Three cheers for Greenspan for raising tough issues.(Opinion)
March 1, 2004... Suddenly, Alan Greenspan has become the skunk at the election-year party. Three cheers for him - he had the courage to tell Congress an unpleasant truth: Entitlements must be cut. Members of Congress, and presidential candidates, have...

Fund reform may cost billions in lost fees; Asset managers likely to suffer the most.(News)
March 1, 2004... Byline: Bruce Kelly The wave of legislation aimed at financial services firms could cost the industry as much as $16 billion annually in fees, according to one analyst. But that is a "worst-case scenario,'' stressed Glenn Schorr, a...

Unwelcome dividend: Filing woes; Confusion over payouts means more amended 1099s.(News)
March 1, 2004... Byline: Frederick P. Gabriel Jr. Financial advisers who prepare, or even review, their clients' tax filings can count on working overtime this tax season. Last year's $350 billion tax cut package is causing widespread confusion over...

Make the inputs better, but optimize; Mean-variance optimization can be a useful planning tool if forecast uncertainty is incorporated.(Opinion)
March 1, 2004... Byline: Richard Michaud Classical mean-variance optimization is a quantitative tool that many investment advisers use to build portfolios for clients. The goal of MV optimization is to find portfolio weights that optimally diversify risk...

Tax Watch: New weapon to help combat tax fraud.(News)
March 1, 2004... Byline: Mark Battersby The 2nd U.S. Circuit Court of Appeals recently ruled that taxes constitute property under U.S. mail and wire fraud statutes. This means that the U.S. government can now prosecute individuals and businesses that try...

Growth gambit: NFP continues to make a splash; Revenue, acquisitions fuel company's growth.(News)
March 1, 2004... Byline: Bruce Kelly National Financial Partners Corp. of New York is intent on sticking to its strategy for growth, so far spending $418.5 million in cash and stock on acquisitions. At an industry conference last week in New York,...

Monday Morning: Investors are getting 'mad as hell'.(News)
March 1, 2004... Byline: Jim Pavia Just when it seems as if things are cooling down, the mutual fund market-timing scandal again rears its ugly head. First we hear that mutual fund employees at Columbia Management Group Inc., a unit of FleetBoston...

House panel: Up SEC clout; Would ax 12(b)-1 fees on funds that close.(News)
March 1, 2004... Byline: Sara Hansard Mutual funds would no longer be able to charge 12(b)-1 fees on funds that are closed, and disciplinary information on brokers would be available online, under legislation approved last week by the House Financial...

Street Wise: Aiming to be 'in the right places at the right time'.(The Markets)
March 1, 2004... Byline: Jeff Benjamin Maureen Cullinane has learned through experience the importance of staying a step or two ahead of the pack. The $1.4 billion Evergreen Omega Fund (EKOAX), which she has managed since it was absorbed in 1989 by...

Conference Call - Missed opportunity: The retirement plan market.(News)
March 8, 2004... Byline: Jeff Benjamin Fear not the defined contribution plan marketplace. This was one of the themes emphasized late last month in Denver during DATAlynx's 11th annual gathering of its financial services industry clients and prospects....

Short Interests: Kicking around the idea of adviser-sold 529 plans.(News)
March 8, 2004... Byline: Rick Miller, Christine S. Lee and Bruce Kelly Some states with direct-sold 529 college savings plans are looking at options for advisers. Illinois is expected to issue a request for proposals this month for an adviser-sold...

Unmarried couples: A planning opportunity; Most advisers don't have experience with this growing group of opposite-sex households.(News)
March 8, 2004... Byline: Rick Miller Overlooked amid all the hoopla surrounding whether gays and lesbians have the right to marry is a larger group with similar issues that advisers may be all but ignoring. The number of unmarried heterosexual couples...

One on One: "More people are finding out about advisers and seeking them ... the future is very bright".(News)
March 8, 2004... Byline: Brooke Southall For Dennis Miller, the transformation is nearly complete. Five years ago, 80% of the clients at his company, Miller/Russell & Associates Inc. in Phoenix, were institutions, including retirement plans, endowments...

Life insurance financial advisers up in arms; They don't agree with their association's support of federal regulation.(News)
March 8, 2004... Byline: Sara Hansard Life insurance financial advisers throughout the country are rebelling against a decision by the association that represents them to support federal regulation of the insurance industry. The board of directors of...

Fidelity plans to rebate tax overage; Margin customers to recoup dividend rate differential.(News)
March 8, 2004... Byline: Brooke Southall Fidelity Investments plans, after all, to cover the additional tax burden of customers who get squeezed by a new rule that blindsided them. This means that customers who receive payments in lieu of dividends...

At the Bell.(Late News)
March 8, 2004... Advisers blase over Stewart conviction * Financial planners and advisers showed little surprise that a federal jury found Martha Stewart and her stockbroker, Peter Bacanovic, guilty of lying to investigators and obstruction of justice. ...

Reverse Spin: Martha Stewart's goose is cooked.(Briefs)
March 8, 2004... Byline: Frederick P. Gabriel Jr. It may be coming to a newsstand near you: "Martha Stewart Living in Jail.'' The woman who created an empire out of quiche and curtains was convicted Friday of all four charges of obstructing justice and...

Monday Morning: Our ethical failings often take root early.(News)
March 8, 2004... Byline: Mike Clowes Many leading business schools have either instituted or revamped ethics courses for master of business administration candidates in response to the corporate scandals that have come to light in the past five years. No...

Specifics lacking from Democratic front-runner.(Opinion)
March 8, 2004... Sen. John Kerry, now that you have the Democratic presidential nomination virtually locked up, let's get specific. You say you will repeal the Bush tax cut for "the wealthiest Americans,'' but you will preserve the tax cut for the middle...

Bank fund groups are wallflowers, study shows; They underperform their brethren.(News)
March 8, 2004... Byline: David Hoffman Bank-advised fund groups tend to underperform other fund groups, and they have higher average expenses. That is the picture that develops when you look at the 10 largest bank fund groups by assets, as ranked by...

Taking Sides: Small businesses' need is advisers' opportunity.(Opinion)
March 8, 2004... Just 14% of companies with fewer than 100 employees have a retirement plan, and just 36% of those with 100 to 500 employees have 401(k) plans, according to Debbie Ward, a product manager at Denver-based First Trust Corp. That is an...

Conference Call: Rebuilding investor trust may require more than regulations.(News)
March 8, 2004... Byline: David Hoffman It seems everyone in the mutual fund industry is focused on rebuilding investor trust. But Stephen Cecchetti, a professor of economics at Brandeis University in Waltham, Mass., wonders if all the proposed rules...

Banks Spitzer's new target; Focus is on their financing of fund timing by hedge funds.(News)
March 8, 2004... Byline: David Hoffman Some of the largest banks may soon find themselves in the hot seat as regulators begin to scrutinize those that financed the illegal mutual fund trading activities of hedge funds. So said David D. Brown IV, chief...

Street Wise: Stock market partial to Democrat in White House.(The Markets)
March 8, 2004... Byline: Jeff Benjamin With both major party presidential candidates apparently in place, it is time for some number crunching to try to figure out how the stock market is likely to react to the outcome of November's election. Lakewood,...

Wary firms to correct billing snafus; They're striving to stay ahead of the regulators.(News)
March 8, 2004... Byline: Bruce Kelly Another mutual fund sales charge snafu has some firms scrambling to change how they bill clients, even though securities regulators are months away from finalizing any new rules. At issue is a frequent disconnect...

If Kerry's in, Bush plans likely out; Especially incentives favoring the rich.(News)
March 8, 2004... Byline: Rick Miller If Sen. John Kerry wins the White House, certain Bush-favored initiatives that encourage savings and investments, particularly those benefiting the wealthy, are presumably dead. Gone would be an executive-branch...

It's second time around for Block adviser effort; Plans to hire 1,000 with experience.(News)
March 8, 2004... Byline: Frederick P. Gabriel Jr. The tax preparer for the masses is revamping its approach to the financial advice business. For years, H&R Block Inc. has been trying, without success, to transform itself into a financial advisory...

Trying to avoid a bad `wrap'; Separates industry reviews fee disclosure.(News)
March 8, 2004... Byline: Jeff Benjamin The $500 billion separately managed accounts industry is working to maintain its squeaky-clean image, particularly in regard to the full disclosure and breakdown of fees charged to investors. While the separates...

Opportunity in mass market.(News)
March 8, 2004... Byline: Joanna Sabatini More than half the households in the United States fall into the so-called mass market and have little access to professional financial advice, even though they grapple with the same life events as wealthy...

Lawsuit may dampen shareholder activism; `Sweatshop' comments imperil social investor.(News)
March 22, 2004... Byline: David Hoffman An unusual defamation lawsuit could have a chilling effect on shareholder activism. That's the conclusion some industry experts have reached in the wake of a first-of-its-kind suit filed Jan. 29 by Cintas Corp. in...

Calif. advisers salivate over muni offering; Those in other states aren't so keen on Golden State's bonds, however.(News)
March 22, 2004... Byline: Brooke Southall California's financial advisers may prove to be just the allies Gov. Arnold Schwarzenegger needs to help bring his state out of its budget crisis. Although financial advisers in neighboring states are shaking...

Failing to communicate can get a manager fired; Schwab consultant recommends removal of Ashfield & Co.(News)
March 22, 2004... Byline: David R. Evanson Without so much as a warning, the consultant for Charles Schwab & Co. Inc.'s separately managed account platform recommended last month that San Francisco large-cap-value manager Ashfield & Co. be removed from the...

Tax Watch: IRS warns taxpayers on 'dirty dozen' tax scams.(News)
March 22, 2004... Byline: Mark Battersby In a recent update of an annual consumer alert, the Internal Revenue Service urges taxpayers to avoid falling victim to one of the so-called dirty dozen tax scams. In a ranking for 2004, several new scams reached the...

Moving Up.(News)
March 22, 2004... * Brinker Capital Inc. in King of Prussia, Pa., has promoted John E. Coyne III, 48, to president, from national director of sales and marketing. He is a registered securities principal and also serves as president of Brinker Capital Securities...

Do-it-yourself investors? Seems they're doing it again; Discount brokers see volume spike.(News)
March 22, 2004... Byline: Jeff Benjamin Do-it-yourself investing is back in vogue, leaving some financial advisers with a queasy sense of deja vu. According to the latest figures from a sampling of brokerage trading platforms, individual investors are...

Happy day$ here again for mogul$; Compensation uptick seen for financial services honchos.(News)
March 22, 2004... Byline: Frederick P. Gabriel Jr. Despite all the hoopla surrounding executive compensation, the paychecks of many top executives in the asset management business went from fat to fatter last year. The average head honcho and their...

Conference Call: Work hard at compliance, banks urged.(News)
March 22, 2004... Byline: Rick Miller The annual convention of the Bank Insurance and Securities Association kicked off last week without any trace of levity. The tone was set early on by the group's general counsel, John F. Hartigan, who warned during...

Beefing up protection for whistle-blowers; Sarbanes-Oxley deadline forces firms' hands on policies and procedures.(News)
March 22, 2004... Byline: Joanna Sabatini Margot Getman knows full well the tribulations of being a whistle-blower. The former research analyst at Southwest Securities Inc. in Dallas says she faced intense pressure in 2001 from the firm's investment...

Barclays scores with dividend index ETF; Fund sees $1.5 billion invested since launch.(News)
March 22, 2004... Byline: Brooke Southall With surprising help from Merrill Lynch & Co. Inc. and other New York wirehouses, Barclays Global Investors has hit its first home run with an exchange traded fund, and the inning is far from over. As of last...

All forms of market timing are not equal; Trend-following market timing, unlike predictive market timing, has been shown to be of value.(Opinion)
March 22, 2004... Byline: John M. Halstead Stock market timing is a difficult activity, but it is not impossible. Why would anyone think an activity that could potentially make one quite wealthy be easy? To use an analogy, it has been argued that hitting a...

Short Interests: S&P maintains status quo on money market funds.(News)
March 22, 2004... Byline: David Hoffman, Rick Miller and Sara Hansard Money market fund investors should consider themselves lucky. Money funds whose management companies have been linked to allegations of late trading and market timing haven't been...

Product Watch: Research distribution is made easier online.(News)
March 22, 2004... Cap Gemini Ernst & Young U.S. LLC in New York has released a solution to help facilitate the mandatory distribution of independent stock research to individual investors imposed on 10 major investment firms under a settlement finalized by the...

Securities America, reps differ on endangered C shares; Advisers hold them in high regard.(News)
March 22, 2004... Byline: Brooke Southall Some financial advisers affiliated with Securities America Financial Corp. report that they are clashing with the Omaha, Neb.-based broker-dealer because they don't see eye to eye on endangered Class C mutual funds....

Investment Strategies: Learning lessons from behavioral finance.(News)
March 22, 2004... Byline: Douglas Mangini Humans are not always rational. Investment models are mathematically based and assume that humans are always rational. Therein lies the challenge to the way we do business. To help clients meet their...

Conference Call: Raymond James execs wary of regulatory overkill.(News)
March 22, 2004... Byline: Bruce Kelly Top executives with Raymond James Financial Inc. in St. Petersburg, Fla., are increasingly frustrated by the broad swath cut by securities regulators, who are leaving practically no part of the retail securities...

Leadership makes for winning firms.(News)
March 22, 2004... Byline: Joel Chernoff Do leadership and culture matter in money management firms? Yes, says Jim Ware, who in his new book, "Investment Leadership: Building a Winning Culture for Long-Term Success'' (John Wiley & Sons, 2004), maintains...

At the Bell.(Late News)
March 22, 2004... Putnam launches TV, print campaign * For the first time in five years, Putnam Investments LLC has launched a national television and newspaper advertising campaign. The campaign, which got under way Thursday, does not directly address...

SEC sends message on e-mails; Keep them 20 years, produce them quickly.(News)
March 22, 2004... Byline: Sara Hansard The Securities and Exchange Commission has adopted a tough policy requiring investment advisers to retain e-mails for as long as 20 years and produce any it wants to see. The SEC has never officially issued...

Taking Sides: Bravo to SEC for improving corporate-event disclosure.(Opinion)
March 22, 2004... If you notice investors walking with a bit of a strut in their stride, it is likely thanks to the Securities and Exchange Commission and the New York Stock Exchange. The SEC and NYSE deserve credit for making several positive decisions on...

Schwab revamps its annuity effort; Offers concierge service to advisers.(News)
March 22, 2004... Byline: Rick Miller Seeking to energize its lagging variable annuity business, Charles Schwab Corp. in San Francisco is launching a service for its independent financial advisers that helps them recommend annuities even if they're not...

Matchmaker seeks additional partnerships; WebFinance refers clients to advisers.(News)
March 22, 2004... Byline: Brooke Southall The failure last summer of InvestorTree.com, an Internet referral service for financial advisers, hasn't deterred Thomas C. Murcko, who launched a similar business in December. "I'm confident that whatever...

12(b)-1 fee limits gain steam, worry advisers; Advisers say client service would suffer.(News)
March 22, 2004... Byline: Sara Hansard Limits on the use of 12(b)-1 fees are gaining support in Congress, causing concern for the many financial advisers who depend on them to support their businesses. The House Financial Services Committee has already...

Those who hit the jackpot need financial advice.(Opinion)
March 22, 2004... When it comes to someone needing a trusted financial adviser, look no further than a young Indiana man named Tim Rivers. The 24-year-old was the sole winner of the recent $89 million Powerball jackpot. Mr. Rivers is an unemployed metal...

Morningstar refuses to budge on `sell Janus'; Won't lift recommendation despite firm's hiring of investment chief.(News)
March 22, 2004... Byline: Frederick P. Gabriel Despite applauding Janus Capital Group Inc.'s announcement last week that it has finally found a new chief investment officer, Morningstar Inc. has no immediate plans to lift its recommendation that investors...

Rules burden even the smallest advisers; So say former SEC executives.(News)
March 22, 2004... Byline: Sara Hansard Major new regulatory burdens are being put on all federally registered investment advisers as a result of the mutual fund trading scandals. The result is that even the smallest advisory businesses face more expenses...

Helping investors manage risk is critical; It's essential for the long-term welfare of clients and the industry.(Opinion)
March 22, 2004... Byline: Michael T. Carpenter We have an incredible opportunity and awesome responsibility to help all investors deal with one of their most important and pressing issues: risk management. Although we have made significant progress in...

At Issue: Life-planning movement didn't sustain a split.(Letters)
March 22, 2004... Brooke Southall's article ["Life-planning movement sustains split,'' March 1] contains some inaccurate information about both the Nazrudin Project and the Kinder Institute of Life Planning. Even the headline is misleading. From my vantage...

Independent researchers unsure deal will help; They question whether big bucks will follow.(News)
March 22, 2004... Byline: Joanna Sabatini Firms that supply so-called independent investment research that met recently at their first trade conference questioned the influence the Wall Street analysts' conflict-of-interest settlement will have on funding...

Datebook.(Calendar/Datebook)
March 22, 2004... MARCH 24 - Building Compliance Programs for Investment Advisers Under the New SEC Compliance Rule, National Regulatory Services. The Hilton San Francisco. (860) 435-0200 or nrs-inc.com. 31-April 2 - Asset Allocation Summit (Platinum...

One on One: "You ... need more women on the branch-manager level and at the regional-manager level".(News)
March 22, 2004... Byline: Bruce Kelly Alexandra Lebenthal, one of the highest- profile women on Wall Street, is hard at work expanding New York's Lebenthal, the municipal bond division of The Advest Group Inc. of Hartford, Conn. "When she's talking...

Monday Morning: Kerry may have spooked stock market.(News)
March 22, 2004... Byline: Mike Clowes Three weeks ago, the bull market stumbled. Commentators suggested a number of reasons for the pullback, including the deadly train bombings in Madrid and weaker-than-expected employment figures. Last week, the...

Street Wise: Separates manager says, 'Hurray for Hollywood!'.(The Markets)
March 22, 2004... Byline: Jeff Benjamin On the surface, Hollywood Media Corp. (HOLL) is already a story worth watching. The Boca Raton, Fla.-based provider of news, information and entertainment ticketing services has five major business divisions...

Royal Alliance goes upscale in recruiting; Hires two top managers from ING Financial.(News)
March 22, 2004... Byline: Bruce Kelly Royal Alliance Associates Inc. is revamping its recruiting efforts to shoot for elite brokers, advisers and practices producing at least $1 million in fees and commissions. Officials at the New York-based company,...

Reverse Spin: Closing the barn door, investment style.(Briefs)
March 22, 2004... Byline: Frederick P. Gabriel Jr. Oh sure, now everyone is worried about trading costs. In a letter to the Securities and Exchange Commission, Fidelity Investments - the daddy of all mutual fund companies - floated the idea of requiring...

Pension coverage uncertain for same-sex couples; Joint-survivor benefits may pose problems.(News)
March 22, 2004... Byline: Gregory Crawford Same-sex marriages, which have grabbed a lot of recent headlines, have yet to register with many plan sponsors, who could face significant issues over joint-survivor benefits and how to include same-sex couples in...

Money managers praise S&P indexes' shift; They say float-adjusted ratings will be an advantage.(News)
March 22, 2004... Byline: Ricki Fulman Money managers are praising the Standard & Poor's plan to shift three major indexes to float-adjusted weightings from all-share weightings. "I think it's a good thing. It's reality,'' said Tom Durante, senior...

Group to aid female adviser going it alone; Organization hopes to offer professional services.(News)
March 29, 2004... Byline: Joanna Sabatini The founder of a new organization for female financial advisers hopes to build a professional center that offers scholarships, mentoring programs and free legal advice. Darla Wilton, a financial services...

Short Interests: B of A settlement dogs fund industry executives.(News)
March 29, 2004... Byline: Frederick P. Gabriel, Sara Hansard Rick Miller and Jeff Benjamin Apparently, the $675 million settlement reached two weeks ago between regulators and Bank of America Corp. in Charlotte, N.C., over allegations of improper trading...

At Issue - NAIFA: Agent 'rebellion' a rank mischaracterization.(Opinion)
March 29, 2004... As president of the National Association of Insurance and Financial Advisors, I write to clarify the mistaken report on responses to NAIFA's regulatory reform policy portrayed in Sara Hansard's March 8 article. NAIFA members are not...

Tax Watch: New battle lines drawn in tax shelter wars.(News)
March 29, 2004... Byline: Mark Battersby The war on abusive tax shelters continues to be waged on several fronts by many players. Senate Finance Committee Chairman Charles E. Grassley, R-Iowa, and Sen. Max Baucus, D-Mont., the committee's ranking...