Investment News articles from March 2005

Investment News archives from March 2005

Merger arbitrage funds pin their hopes on M&A activity this year; But if deals go awry as in 2004, trouble may loom.(News)
March 7, 2005... Byline: David Hoffman NEW YORK - Some market experts expect mergers-and-acquisitions activity to continue to increase, building upon increases seen last year - which at first glance would seem to be good news for merger arbitrage funds....

Putnam will have to open coffers even wider.(Reverse Spin)
March 7, 2005... Byline: Frederick P. Gabriel Jr. Let's hope the accounting department at Putnam Investments LLC has a little mad money set aside. That is because the Boston-based fund company agreed to pay an additional $83.5 million to current and...

LTC needs chronically underestimated, survey says.(Short Interests)
March 7, 2005... Byline: Gary S. Mogel NEW YORK - No matter how many surveys conclude that people will probably need long-term care at some point in their lives - and how neglecting LTC needs can result in financial hardship - the message doesn't seem to...

Life reinsurer enters market.(Short Interests)
March 7, 2005... Byline: Gary S. Mogel NEW YORK - While the availability and cost of reinsurance are often cited as reasons for rising life insurance premiums, advisers and their clients have reason to welcome a new entrant into the life reinsurance arena....

Get ready for changes in the work force.(Monday Morning)
March 7, 2005... Byline: Jim Pavia America is said to be approaching a crisis in its work force. A variety of reports, studies and surveys have concluded that the crisis is developing because of the convergence of two demographic trends: the increasing...

Some in Congress support enhancing 'automatic' 401(k)s; National initiative focuses on workers with low and moderate incomes.(News)
March 7, 2005... Byline: Sara Hansard WASHINGTON - Congressional leaders who deal with retirement issues are taking an interest in looking at ways to enhance "automatic'' 401(k)s, after a new national initiative was announced last week to make the defined...

Insurers beefing up training on annuities; Addressing information gap found among clients.(News)
March 7, 2005... Byline: Gary S. Mogel NEW YORK - Insurers selling annuities are ratcheting up their consumer education and adviser training to combat the lack of information - as well as the misinformation - about annuities and their benefits. "Many...

IRS clears up confusion over IRA account wrap fees; Fees can be paid with outside money, and thus are tax deductible.(News)
March 7, 2005... Byline: Rick Miller CHICAGO - The Internal Revenue Service may have given fee-based advisers the upper hand over their commissioned brethren when it handed down a private-letter ruling last month on the treatment of fees for individual...

Anti-laundering fines common for brokers.(News)
March 7, 2005... Byline: Bruce Kelly NEW YORK - Along with Gunn- Allen Financial Inc. of Tampa, Fla., NASD has fined almost 20 broker-dealers over the past couple of years for violations of anti-money-laundering rules. According to NASD, it fined WR...

People.
March 7, 2005... The CFA Institute in Charlottesville, Va., has made a change at the top. Jeffrey Diermeier, CFA, 51, has assumed his duties as president and CEO. A chartered financial analyst, he was chosen last May to fill the positions being vacated by...

At the Bell; Pitt tells bankers to self-regulate.(Late News)
March 7, 2005... Harvey Pitt, former chairman of the Securites and Exchange Commission, told attendees of the American Bankers Association's Wealth Management and Trust Conference in Orlando, Fla., Thursday that an environment of ''overlegislation,...

Hurricane protection?(Short Interests)
March 7, 2005... Byline: Sara Hansard WASHINGTON - The ideas for tax-advantaged savings accounts just won't stop. Florida Chief Financial Officer Tom Gallagher said in a press release that he met with several members of Florida's congressional...

Softer, gentler version of hedge fund to launch; Proposed mutual fund called `alternative to alternatives'.(News)
March 7, 2005... Byline: David Hoffman NEW YORK - A new kind of mutual fund is on the horizon, one that invests in separately managed accounts and shoots for absolute returns. Next month, New York-based Absolute Investment Advisers Inc. is hoping to...

Russell casts wider net, reaps asset bonanza; New net assets more than doubled to $3.4 billion last year.(News)
March 7, 2005... Byline: Brooke Southall SAN FRANCISCO - Russell Investment Group made its name by loyally serving a small, select group of financial advisers. Now the Tacoma, Wash.-based investment company is reaping an asset bonanza by embracing a...

Investors dismiss execs.(Short Interests)
March 7, 2005... Byline: Jeff Benjamin DETROIT - A new investor survey showed that high-profile corporate executives have little impact on a particular company's stock sales, unless of course those high-profile executives happen to be Carly Fiorina or...

Seat price on Big Board rises to $1.5M; Increase of 50%-plus since early in year.(News)
March 7, 2005... Byline: Bruce Kelly NEW YORK - The price of a seat on the New York Stock Exchange hit - and held - high ground last week, rebounding sharply over its lows set in January. On Tuesday, a NYSE seat sold for $1.5 million, and another seat...

Let's not fall victim to the relentless rules of arithmetic.(Other Views)
March 7, 2005... Byline: John C. Bogle While truly staggering amounts of investment literature have been devoted to the efficient-market hypothesis, precious little has been devoted to the cost matters hypothesis. However, to explain the dire odds that...

SEC reopens commentary on point-of-sale proposal.(Short Interests)
March 7, 2005... Byline: Sara Hansard WASHINGTON - The Securities and Exchange Commission last week said it had reopened commentary on its controversial point-of-sale proposal. The move signals that the commission is rethinking the proposal, which is...

Round Table Panelists.(Round Table)
March 7, 2005... From left to right Anthony J. Domino, chartered financial consultant and president of Associated Benefit Consultants LLC of White Plains, N.Y. and president of the Society of Financial Service Professionals of Bryn Mawr, Pa. James...

Planners upbeat about future but they fear overregulation; Career paths and proliferation of credentials are also matters of concern.(Round Table)
March 7, 2005... Byline: Charles Paikert NEW YORK - At InvestmentNews' round table on the state of financial planning, optimism about the future of the profession was tempered by mounting concerns about increased regulation. Panelists representing a...

FSI seeks study on broker data; Hopes to show indies are cleaner than others, but ready for bad news.(News)
March 7, 2005... Byline: Bruce Kelly NEW YORK - Looking to show that independent broker-dealers - and their affiliated representatives - are among the cleanest in the industry, the Financial Services Institute has petitioned NASD to comb through its reams...

Fiserv unit ready for close-up.(Conference Calls)
March 7, 2005... Byline: Jeff Benjamin DENVER - Financial advisers attending the 12th annual Discover 2005 conference here last week got their first up-close look at Fiserv Investment Support Services, a brand that was essentially created less than a year...

SEC must update restricted stock plan rules.(Editorial)
March 7, 2005... A great many executives in corporate America receive dividends on stock they don't actually own. These executives get large dividend payments as part of their company's restricted-share -award plan. Restricted shares refer to company stock...

Schwab dodges a bullet.(Short Interests)
March 7, 2005... Byline: Brooke Southall SAN FRANCISCO - E*TRADE FINANCIAL Corp. has acquired its first independent-advisory firm, and Charles Schwab & Co. Inc. has dodged a bullet. The New York-based discount broker purchased Howard Capital...

Calendar.(Calendar/Datebook)
March 7, 2005... MARCH 9 - Global Investment Performance Standards Interactive Workshop, CFA Institute. Langham Hotel, London. (800)247-8132 or cfainstitute.org. 9-11 - Certifying Executive Officer Conference for Broker-Dealers, Na-tional Regulatory...

IRS lists SILO leasing transactions as abusive.(Tax Watch)
March 7, 2005... Byline: Mark Battersby The Department of the Treasury and the Internal Revenue Service have issued guidance designating sale-in/lease-out arrangements as abusive tax-avoidance transactions. This is not good news for investors in the...

NASD examines anti-money-laundering programs; Fines GunnAllen $30,000 for 2002, 2003 violations.(News)
March 7, 2005... Byline: Bruce Kelly NEW YORK - NASD is taking a close look at its broker-dealer members' ability to comply with anti-money-laundering regulations. Broker-dealers, like banks, have been facing greater pressure since enactment of the USA...

Closing Quote.(Quotes)
March 7, 2005... "I've had a root canal, and I've been audited by the IRS. I'd prefer those two to the SEC, because with the SEC, you know you can't win.'' Bernard Kiely, owner and president of Kiely Capital Management Inc. in Morristown, N.J. Page 14

Cooking up a plan to key in on small growth.(Street Wise)
March 7, 2005... Byline: Jeff Benjamin To the untrained eye, a company such as Turbochef Technologies Inc. (TCF) might appear to be just another maker of high-priced, industrial-quality cooking systems - or what some might call expensive ovens. But to...

The market's up, but the financial adviser's down.(Other Views)
March 7, 2005... Byline: John P. Donovan Financial consultants aren't satisfied in their work. While wholesalers seem relatively upbeat, and sales managers are pragmatic, retail financial consultants, despite being in great demand, seem to be crying out...

CIO honed skills at Camp Muhlenkamp.(Short Interests)
March 7, 2005... Byline: David Hoffman NEW YORK - He isn't well known, but if Charles Smith continues to follow in the footsteps of his former boss, he might be. He is principal and chief investment officer of Fort Pitt Capital Group Inc. in Pittsburgh...

Use of 12(b)-1 fees has shifted away from distribution; More than half used for continuing shareholder services.(News)
March 7, 2005... Byline: Sara Hansard WASHINGTON - Of the $10 billion in 12(b)-1 fees collected by mutual funds last year, more than half went to continuing shareholder services, according to a study from the Investment Company Institute. The study,...

American Express launches individual(k) plan.(Product Watch)
March 7, 2005... American Express Financial Advisors Inc., a Minneapolis-based subsidiary of American Express Co. in New York, has introduced the American Express Individual(k), a 401(k)-based plan designed to provide self-employed professionals with added...

Small fund firms struggle with revenue sharing; They can't afford it, though agreements must be disclosed.(News)
March 7, 2005... Byline: Ilana Polyak NEW YORK - While the revenue-sharing debate has focused on the under-the-table agreements between the major brokerage firms and some of the biggest fund companies, smaller fund shops have largely stayed out of the...

New 401(k) plan investment twists explored.(Conference Calls)
March 7, 2005... Byline: Rick Miller MIAMI - The latest buzz in 401(k) plan investment options includes the use of collective trusts, exchange traded funds, separate accounts - and a twist on the use of group fixed annuities. Merrill Lynch & Co. Inc....

Search engine finds advisers with 'right' mark.(Short Interests)
March 7, 2005... Byline: Charles Paikert NEW YORK - Relief may be on the way for consumers suffering from credential fatigue while looking for a financial planner. According to The American College, a Bryn Mawr, Pa.-based non-profit institution...

One on One With John T. Hailer of IXIS Asset Management Advisors Group.(One on One)
March 7, 2005... Byline: Frederick P. Gabriel Jr. Even though his company owns an enviable collection of top investment management firms, John T. Hailer has his work cut out for him. Since late 2000, the chief executive of IXIS Asset Management...

Panel seeks tax code comments.(Short Interests)
March 7, 2005... Byline: Rick Miller CHICAGO - Want to gripe about the tax code to people in a position to do something about it? Connie Mack, who is chairman of the President's Advisory Panel on Federal Tax Reform, says bring it on. The former...

Advisers aren't OK with an SRO.(Short Interests)
March 7, 2005... Byline: Brooke Southall SAN FRANCISCO - Financial advisers don't want anyone telling them what to do - least of all themselves. At its conference this month, TD Waterhouse Group Inc. of New York completed a survey of its advisers to...

Rich get richer, report shows.(Short Interests)
March 7, 2005... Byline: Aaron Siegel NEW YORK - The rich keep getting richer, and a new report by independent market analyst Datamonitor PLC verifies that cliche. The report, released last month, found that the United States was home to 8.5 million...

Roundtable Transcript.(Round Table)
March 7, 2005... The following is the edited transcript of the round-table discussion: Mr. Paikert: I'd like to ask each of you what you think is the most important issue facing financial planners right now. Mr. Milne: Right now, obviously the most...

Fund launches petering out; down 60%; New offerings slid to 260 in 2004, from 729 in 2000.(News)
March 7, 2005... Byline: Frederick P. Gabriel Jr. BOSTON - Mutual fund company executives are making fewer trips to the launching pad. Fewer new mutual funds hit the market last year than in any other year going back at least a decade, according to...

Anti-laundering fines common for brokers.(News)
March 7, 2005... Byline: Bruce Kelly ***** Correction: In an article in last week's issue, Theodore E. Charles, the chief executive of Investors Capital Corp. in Lynnfield, Mass., was incorrectly identified as the firm's president. Tim Murphy is the...

Advisory panel debates reforming 'tax code nightmare'.(Tax Watch)
March 14, 2005... Byline: Mark Battersby When the President's Advisory Panel on Federal Tax Reform met for the first time recently, several top economists debated the merits of a tax system based on consumption or based on income. Afterward, its vice...

Strong acquisition adds strength to Wells Fargo's 401(k) group; Acquiree's arm known for employee communication and education.(News)
March 14, 2005... Byline: Cecily O'Connor SAN FRANCISCO - As executives at Wells Fargo & Co. here work toward full integration of Strong Financial Corp.'s $29 billion in assets under management, one piece of the acquisition puzzle is in place: the 401(k)...

Calendar.(Calendar/Datebook)
March 14, 2005... MARCH 17 - 401(k) Summit, American Society of Pension Actuaries. Manchester Grand Hyatt, San Diego. (703)516-9300. 17 - Fifth annual Anti-Money-Laundering Compliance Conference, Securities Industry Association. Grand Hyatt, New York....

With Beth L. Climo of the American Bankers Insurance Association and ABA Securities Association.(One on One)
March 14, 2005... Byline: Gary S. Mogel Although bank sales of insurance and annuities are increasing, the concept of selling these products through banks never really took off. Sales of insurance products by banks were $78.1 billion in 2003, the last...

Snapshot.(One on One)
March 14, 2005... Beth L. Climo, 53, executive director of the American Bankers Insurance Association and ABA Securities Association in Washington since 1996 Career: 1991-96, general counsel and director of the office of legal and external affairs of the...

ETF providers likely to turn to fixed income; Bonds seen to have more potential than international equity.(Exchange Traded Funds)
March 14, 2005... Byline: David Hoffman NEW YORK - Expect more innovations from providers of exchange traded funds as they attempt to capture more assets, industry experts say. Specifically, expect to see more fixed-income ETFs, said Andrew Clark, a...

The key-account manager can help unlock sponsor riches.(Other Views)
March 14, 2005... Byline: Mark Elzweig and Nancy Miller Not so long ago, money managers campaigned to market their services on as many distribution platforms as possible, from wirehouse to independent adviser. That is no longer the case. Money managers...

Greenspan wants a tax code with predictability.(Conference Calls)
March 14, 2005... Byline: Sara Hansard WASHINGTON - The predictability of the tax code is one of the most important principles the government needs to focus on, Federal Reserve Board Chairman Alan Greenspan told a panel looking at tax reform. He told...

NFP steadily adds planning firms, reps; Company made 10 acquisitions in first six weeks of 2005.(News)
March 14, 2005... Byline: Bruce Kelly NEW YORK - National Financial Partners Corp. of New York is continuing to build its independent-contractor broker-dealer and financial planning groups. Last year, it made 18 acquisitions of financial planning firms,...

Tough tack needed for white-collar criminals.(Editorial)
March 14, 2005... Byline: Jim Pavia Apparently, crime does pay. White-collar criminals are evidently treated as a higher class of thieves after they are caught stealing money from investors and shareholders, and looting their respective companies. ...

Wealth management conference eyes impact of boomers, regs.(Conference Calls)
March 14, 2005... Byline: Charles Paikert ORLANDO, Fla. - Social and regulatory trends emerged as major themes at the recent Washington-based American Bankers Association's Wealth Management and Trust Conference held here. Issues covered ranged from the...

Orman to speak at Avaya's 401(k) days.(Short Interests)
March 14, 2005... Byline: Aaron Siegel NEW YORK - It is no April Fools' Day joke: Television personality Suze Orman is slated to speak during the first in a series of Avaya 401(k) days April 1. Avaya Inc., a communications and software company based in...

Cancer is No. 1 long-term claim.(Short Interests)
March 14, 2005... Byline: Gary S. Mogel NEW YORK - For the fourth year in a row, cancer was the No. 1 cause of long-term-disability claims in 2004, according to UnumProvident Corp. Rounding out the top five reasons for claims of long-term - over 90 days...

Refugees have less money, clear conscience; Brokers who left Merrill to start their own firm say they wanted to do right by clients.(News)
March 14, 2005... Byline: Brooke Southall SAN FRANCISCO - When Dirk Anderson and Peter Fisher left Merrill Lynch & Co. Inc. last year, the brokers walked away from a big combined book of business and multimillion-dollar offers from competing firms. ...

SEC's 'get out of jail free' card is selling the small investor short.(Other Views)
March 14, 2005... Byline: Glenn E. Hudson Do you think it should be illegal to sell something you don't own? Apparently, the Security and Exchange Commission doesn't think so. Last July 28, it adopted Regulation SHO with a compliance date of Jan. 3....

Survey shows retirement confidence.(Short Interests)
March 14, 2005... Byline: Rick Miller CHICAGO - Isn't it just like kids to think they can do things better than their parents? But when it comes to saving for retirement, they may have a point. Nearly three out of four Americans said they would be...

Raising FICA level could create problems.(Editorial)
March 14, 2005... President Bush and Congress should be extremely careful about raising the salary level on which the Federal Insurance Contributions Act tax - the Social Security tax - is levied. Last month, he said that while he is opposed to raising the...

Education makes little difference for poor 401(k) savers; 70% of those surveyed said they could afford to increase contributions.(News)
March 14, 2005... Byline: Rick Miller CHICAGO - Many poor savers in 401(k) plans who miss out on the company match don't change their behavior even after receiving educational materials to alert them, according to a recent study by Hewitt Associates LLC in...

Bank VA sales close gap on fixed annuities; Rising interest rates make fixed annuities less popular.(News)
March 14, 2005... Byline: Gary S. Mogel NEW YORK - Banks still sell more fixed than variable annuities, but the gap is shrinking, according to a report released this month by Jackson National Life Insurance Co. and Kenneth Kehrer Associates Inc. VA...

'Hard 4' replacement may be issued in April.(Late News)
March 14, 2005... The Securities and Exchange Commission may issue a new proposal by mid-April to replace the controversial "hard 4 p.m.'' closing time for mutual fund trades. The original proposal to prevent illegal late trading in funds met with...

Financial Profiles enhances estate-planning tools.(Product Watch)
March 14, 2005... Financial Profiles Inc. in Carlsbad, Calif., has released Profiles+ Professional Version 7.5 with advanced estate-planning features. The product helps advisers to solve their clients' complex financial problems while also offering...

Mutual fund manager takes a flier on Ukraine; Third Millennium Russia adds four stocks from neighboring country.(Short Interests)
March 14, 2005... Byline: David Hoffman NEW YORK - Given recent events in Ukraine, at least one mutual fund believes that the time is right to begin investing there. The $60 million Third Millennium Russia Fund, advised by Third Millennium Investment...

Websites improving, study says.(Short Interests)
March 14, 2005... Byline: Charles Paikert NEW YORK - Financial services companies are providing financial advisers with better websites, according to an industry consulting firm that ranks the sites annually. The top 10 websites for financial...

So long, farewell, bye-bye.(Short Interests)
March 14, 2005... Byline: Jeff Benjamin DETROIT - Golden Tree Asset Management LP, a specialty money manager, is saying so long to $1.2 billion worth of long-only client assets. The New York-based firm, which also manages $6.5 billion worth of various...

Wealth management catches on at banks as they play catch-up; `Perception issue' seen as one reason why competition has big edge, FPA study shows.(News)
March 14, 2005... Byline: Charles Paikert NEW YORK - Scrambling to keep pace with the growing wealth management business, banks are increasingly offering innovative services to distinguish themselves from their competitors. Banks, however, dramatically...

Trading rises in Montauk.(Short Interests)
March 14, 2005... Byline: Bruce Kelly NEW YORK - In the middle of a merger, First Montauk Financial Corp. (FMFK.OB) has seen a flurry of activity in the trading of its shares, with the average volume over the three months through last Tuesday increasing to...

Canada lifts caps on retirement investment; Who will profit from the move is a burning question.(News)
March 14, 2005... Byline: David Clarke OTTAWA - In a surprise move, Canada has abolished limits on how Canadians invest their retirement saving dollars, opening a whole new ballpark for many players. The scrapping last month in the federal budget of the...

Turner fund turned out once again.(Short Interests)
March 14, 2005... Byline: David Hoffman NEW YORK - Who's your daddy? For investors in the $5.5 million Turner Core Growth Fund, the answer keeps changing. On May 7, the fund, part of the Turner Funds, advised by Turner Investment Partners Inc. in...

Ex24 dangles iPods as incentive.(Short Interests)
March 14, 2005... Byline: Jeff Benjamin DETROIT - The founders of a fledgling online stock-trading platform, ex24.com, will apparently stop at nothing to attract new customers to the 11-month-old site. Last week, the Naples, Fla.-based operation started...

Walnut St. alters payout grid: 96% for $5M+ GDC offices; Action may be way to create bigger-producing groups of brokers, observers say.(News)
March 14, 2005... Byline: Bruce Kelly NEW YORK - Four weeks before MetLife Inc. said it was going to acquire Travelers Life and Annuity Co. from Citigroup Inc., MetLife's broker-dealer subsidiary, Walnut Street Securities Inc., rejiggered its payout in an...

Growing interest in hedge funds fuels Lipper buys; Firm battles Morningstar to offer research.(News)
March 14, 2005... Byline: Jeff Benjamin DETROIT - Lipper Inc.'s giant step into the hedge fund marketplace last week, through the acquisition of a database and web-based news service, is said to reflect directly the evolving appetites of financial advisers...

Term-only insurance licensing plan blasted; Agents, regulators criticize legislation eyed by several states.(News)
March 14, 2005... Byline: Gary S. Mogel NEW YORK - An adviser and agent trade group, as well as several regulators, are blasting proposed legislation that would create insurance licenses to sell only term insurance, saying they are opposed to diluting...

Transparency for bonds is viewed as a plus; But some advisers warn that efficiency can be a double-edged sword.(News)
March 14, 2005... Byline: David Hoffman NEW YORK - Financial advisers, for the most part, are happy that increased transparency has finally come to the bond markets, even though it is unlikely to induce more direct investment by individuals. Some, however,...

People.
March 14, 2005... Fiduciary Trust Co. International in New York has appointed John J. Pettenati, 45, senior vice president for individual-business development. His responsibilities include advising individuals and families on Fiduciary Trust's investment...

FSI opposes rule proposal to alter SRO governance; Potential impact on NASD is the chief concern.(News)
March 14, 2005... Byline: Bruce Kelly NEW YORK - The Financial Services Institute has strong concerns about the potential impact on NASD from recent Securities and Exchange Commission rule proposals about the governance of self-regulatory organizations. ...

Putnam aims to get growth team on track; But its wholesale restructuring is largely over.(News)
March 14, 2005... Byline: Frederick P. Gabriel Jr. BOSTON - Putnam Investments LLC is putting the finishing touches on a dramatic eight-month restructuring that has included a management shakeup and a nearly 10% reduction in jobs in its investment management...

Going beyond the 529 savings plan.(News)
March 14, 2005... Byline: Rick Miller Planners use unconventional methods to help clients create funds for their children's future CHICAGO - When Randy and Renee Heflin put their three boys to work in the family's cattle and ranching business, they also...

For Roye's successor, improved disclosure ranks high on to-do list; SEC could name a replacement this week.(News)
March 14, 2005... Byline: Sara Hansard WASHINGTON - The next top cop on the mutual fund beat, who could be named as early this week, faces the daunting task of making information provided to fund investors easier to digest. That is the consensus of...

Putnam goes under the microscope again.(Reverse Spin)
March 14, 2005... Byline: Frederick P. Gabriel Jr. Putnam Investments LLC just can't get those regulators off its back. The Department of Labor is investigating the Boston mutual fund company for restrictions on trading of its parent company's stock...

Fund's hallmark was good record, not marketing.(Street Wise)
March 14, 2005... Byline: Jeff Benjamin The Chicago money management firm Segall Bryant & Hamill Investment Counsel has a 10-year history and a pretty good handle on managing more than $4 billion worth of separate-account assets. But after five years of...

Closing Quote.(Quotes)
March 14, 2005... "We felt that we had more than our managers to deal with; we had God to deal with if we were messing with our clients.'' Broker Peter Fisher, on why he and Dirk Anderson left Merrill Lynch & Co. Inc. last year and started their own firm....