Investment News articles from May 2003

Investment News archives from May 2003

Big growth is expected in 529 plans; Proprietary options seen dominating.(News)
May 5, 2003... Byline: Arleen Jacobius Assets in Section 529 college savings plans are expected to grow to $145 billion in 2008 from $20 billion in 2002, according to a new study by Cerulli Associates Inc. But most of the money is expected to stay in...

A $450M boondoggle that'll solve nothing.(Opinion)
May 5, 2003... Byline: Richard Prati A key component of the $1.4 billion agreement between regulators and 10 of the largest Wall Street firms requires the latter to spend $450 million for research from independent research firms - those that don't offer...

One on One: "Americans have a greater, more urgent need to invest for retirement than ever before".(News)
May 5, 2003... Byline: Bruce Kelly With about 9,000 brokers spread across six separate independent broker-dealers, Jay S. Wintrob wants to keep each of them happy - and productive. No doubt, during the down market of the past three years, that...

Fast Track: Head of Fidelity's charity fund has faith.(News)
May 5, 2003... Byline: Frederick P. Gabriel Jr. Talk about being in the right place at the wrong time. Just as growth in philanthropic giving is starting to stagnate, Jon J. Skillman is handed the reins of the nation's best-known donor-advised fund,...

Broker-dealer woos elite Bay Area stockbrokers; Aims to convert them to fee-based enterprises.(News)
May 5, 2003... Byline: Brooke Southall A San Francisco entrepreneur with a wirehouse pedigree wants to hire some old dogs and teach them new tricks. Seth J. Gersch, president and chief executive of Presidio Capital Advisors LLC, moved his firm into...

Innovative new ETFs face uphill struggle; A crowded market makes attracting assets difficult.(News)
May 5, 2003... Byline: David Hoffman The world of exchange-traded funds is changing. Money management companies are coming out with innovative ETFs that tweak the index model on which they are based. One company introduced two ETFs last week that...

Monday Morning: For diversification, think along class lines.(News)
May 5, 2003... Byline: Mike Clowes At most conferences I attend, there is a moment of epiphany, an "aha!'' moment when something long buried in the recesses of my mind is dragged to the surface. Such a moment occurred last week during a presentation...

Some observers detect opportunities for patient buyers; A silver lining is seen for VC investments.(News)
May 5, 2003... Byline: Jeff Benjamin Venture capital investors continue to wait for the public equity markets to pull their once-high-flying industry out of its three-year slump. But despite 12 consecutive quarters of declining VC investments, some...

At the Bell.(Late News)
May 5, 2003... TD Bank denies plan to sell Waterhouse TD Waterhouse USA is not for sale, says Kelly Hechler, a spokewoman for TD Bank Financial Group in Toronto, which owns the New York-based discount broker. The Wall Street Journal and the Financial...

Street Wise - Attention Kmart stock shoppers: Retailer is back.(The Markets)
May 5, 2003... Byline: Jeff Benjamin The famous "Bluelight Special'' is making a comeback as Kmart Corp. attempts to go where few retail chains have gone before. The Troy, Mich.-based company - still the nation's third-largest discount retailer -...

Need CFP? Try your local bank; Competitive Southeast is most fertile ground.(News)
May 5, 2003... Byline: Brooke Southall Banks have never competed successfully against wirehouses for the wallets of U.S. investors, but they are very good at competing with one another. With the recent push toward making every retail employee who...

Taking Sides: Planners should take the high road.(Opinion)
May 5, 2003... Ethical behavior, someone once said, is doing the right thing even when no one is looking. That's a great way for financial planners and investment advisers to measure their own behavior toward their clients. Are they doing the right...

Settlement may sting advisers; Many expect to receive less research support.(News)
May 5, 2003... Byline: Sara Hansard Financial advisers could suffer some unintended consequences of the $1.4 billion conflict-of-interest settlement. Specifically, the settlement could result in Wall Street firms' cutting back on research support to...

Taking Sides: More Street cleaning needed.(Opinion)
May 5, 2003... The settlement recently agreed to by the Securities and Exchange Commission, state officials and major Wall Street firms looks impressive at first glance, but it comes up short in one key area: Not enough heads have rolled. Sure, a few...

Short Interests: Life insurance coverage is inadequate.(Briefs)
May 5, 2003... Byline: Sara Hansard, Tessa van Staden and Brooke Southall Most Americans with household incomes of at least $100,000 lack enough life insurance to replace their salaries permanently. But these same people insist they have enough coverage....

Current market favors those with high risk tolerance; Investors shower assets on junk-bond funds.(News)
May 5, 2003... Byline: David Hoffman High-yield-bond funds are generating big returns and attracting assets at a near-record pace. At the end of the first quarter, such funds had raked in $9.7 billion, according to J.P. Morgan Chase & Co. in New...

Reverse Spin: War in Iraq fails to defeat consumers.(Briefs)
May 5, 2003... Byline: Frederick P. Gabriel Jr. You didn't really think the war with Iraq was going to sap consumer confidence forever did you? The New York-based Conference Board reported Tuesday that its index of consumer confidence surged to 81 in...

Datebook.(Calendar/Datebook)
May 5, 2003... MAY 6-9 - Annual Operations Conference and Exhibit, Securities Industry Association. Boca Raton (Fla.) Resort and Club. sia.com. 11-14 - Operations Conference, National Association for Variable Annuities. Westin Charlotte (N.C.)....

401(k) bigs use advice to retain $; Fidelity, Merrill move in; will advisers get left out?(News)
May 5, 2003... Byline: Brooke Southall The Wal-Martization of delegated financial advice is here - and it could hurt planners and advisers. In the past two months, some of the biggest names in financial services have began to sell customized...

Critics bash fund company on corporate governance; Janus comes under more fire.(News)
May 5, 2003... Byline: Frederick P. Gabriel Jr. After taking a public flogging for loading up on dot-com stinkers during the late 1990s, Janus now faces mounting concern about its corporate-governance record. Recently, Janus Capital Group Inc. has...

Debunking some economic scare tactics; Crisis, risk and uncertainty will always be there, but over the long term, the markets muddle through.(Opinion)
May 5, 2003... Byline: John Buckingham There is an adage in the investment and newsletter business: "Disaster sells.'' The view is that to increase business, or circulation, one need simply to assume the role of Chicken Little and frighten people into...

Conference Call: Putnam exec says all's well with the economy.(News)
May 5, 2003... Byline: Sara Hansard The economy is better than many people realize, and stocks are undervalued. That was the message David Kelly, senior vice president and economic adviser at Putnam Investments LLC in Boston, delivered to more than...

Moving Up.(News)
May 5, 2003... * The Securities Investor Protection Corp. in Washington has announced that the Senate has confirmed William R. Timken Jr., 64, Thomas W. Grant, 61, and Noe Hinojosa Jr., 41, as directors of the corporation, which maintains a special reserve...

Tax Watch: Sorry, no wiggle room on claim deadlines.(News)
May 5, 2003... Byline: Mark Battersby It's common knowledge that in order to get a refund, a tax return must be filed. But what if taxes have been withheld? Surprisingly, if no return is filed, the ability to claim a credit for withheld taxes (or...

Tax Watch: Free File still an option for the extension crowd.(News)
May 12, 2003... Byline: Mark Battersby The Internal Revenue Service is reminding taxpayers that Free File, the tax preparation and electronic-filing service, remains available for people who received filing extensions. More than 2.7 million taxpayers...

Short Interests: Roman Catholic, but not catholic, funds.(Briefs)
May 12, 2003... Byline: David Hoffman and Sara Hansard Finding investments that don't violate the core principles of the Roman Catholic Church is now a little easier, thanks to Schwartz Investment Counsel Inc. in Bloomfield Hills, Mich. The firm...

Conference Call: Restoring client trust tops brokerage wish list.(News)
May 12, 2003... Byline: Bruce Kelly The brokerage industry has duly noted that client trust has been badly shaken following last month's $1.4 billion settlement with securities regulators. That was the message from the TowerGroup Financial Services...

Feds want advisers to foster compliance; Patriot Act rules a sign of heightened scrutiny.(News)
May 12, 2003... Byline: Bruce Kelly The red tape is getting thicker for registered investment advisers. Last month, the Department of the Treasury's Financial Crimes Enforcement Network proposed anti-money-laundering rules that would bring investment...

Thrivent after more Lutherans - and advisers; Aims to be big player in financial services.(News)
May 12, 2003... Byline: Jeff Benjamin Thrivent Financial for Lutherans, the country's largest fraternal-benefits society, has laid out the welcome mat for financial advisers as part of its strategy to develop a full-service financial organization. ...

CFP Board censures 18; revoking marks of five; Suspends seven others, admonishes six more.(News)
May 12, 2003... Byline: Rick Miller Eighteen CFPs were disciplined in the latest round of actions by the professional review board of the Certified Financial Planner Board of Standards Inc. Five individuals permanently lost the right to use the CFP...

Moving Up.(News)
May 12, 2003... * Old Mutual U.S. Life in Baltimore has appointed Bruce Parker, 43, president of its Fidelity and Guaranty Life, and Americom Life and Annuity, subsidiaries. Mr. Parker will continue to serve as chief marketing officer of Old Mutual U.S. Life....

Dollar cost averaging takes another beating.(News)
May 12, 2003... Byline: Rick Miller Investors think dollar cost averaging is the best way to ensure that they buy stocks at lower than the average price. But for Moshe Milevsky, a finance professor at York University in Toronto, dollar cost averaging...

SARS takes its toll on China-region funds; Is the worst over? Opinions are mixed.(America's Investment)
May 12, 2003... Byline: Frederick P. Gabriel Jr. As SARS continues to wreak havoc, shareholders of mutual funds that invest in China and other parts of Asia are getting hit with a case of the financial sniffles. China-region funds in particular have...

Regulatory red tape ensnares fund industry; Focus now turns to implementation.(America's Investment)
May 12, 2003... Byline: Sara Hansard Mutual funds may have this to say to regulators: "Enough already!'' Even as the fund industry gears up to handle major new regulations resulting from the Sarbanes-Oxley Act and the USA Patriot Act, it may still...

After slow 2002, business with wealthy investors picks up; Flow of new clients heartening to advisers.(News)
May 12, 2003... Byline: Liz Skinner Financial advisers lost a lot of clients last year, but new customers, especially rich ones, appear to be coming through the doors again. The continued stock market slump, personal economic struggles, and threats...

Street Wise: A grand entrance into the adviser marketplace.(The Markets)
May 12, 2003... Byline: Jeff Benjamin MDT Advisers Inc. is busting out of the box with an effort to bring its investment strategy to the financial-adviser marketplace. Founded in 1991 to manage the profit-sharing plan assets for Cambridge, Mass.,...

Reverse Spin: Tax-deferral bill OK by fund industry.(Briefs)
May 12, 2003... Byline: Frederick P. Gabriel Jr. Hey Mikey, the mutual fund industry likes it! The Investment Company Institute last Wednesday came out in favor of proposed legislation that would allow fund investors to defer tax payments on...

Taking Sides: Mutual funds must step up.(Opinion)
May 12, 2003... Mutual funds have always been great investments for individual investors, but they could be even better. In fact, the fund industry will have to improve its products in many ways if it wants to continue to grow and be the bedrock of most...

Pitches new tools to financial advisers; Morningstar: Bench the traditional benchmarks.(News)
May 12, 2003... Byline: Sara Hansard Investors don't base their portfolios on what stocks are in the Dow Jones Industrial Average, the Nasdaq Composite Index or the Standard & Poor's 500 stock index. So why does the market continue to use those...

At Issue; Should hedge funds hold cash? Absolutely.(Letters)
May 12, 2003... Your article ["Hedge funds hiding,'' April 14] merely showed me that there are still "hedge fund consultants or investors'' who don't get it. I am happy that my hedge fund managers were holding a lot of cash last year and in January and...

Governance regs don't fit us, fund firms say; Operating companies face less scrutiny.(America's Investment)
May 12, 2003... Byline: Sara Hansard The mutual fund industry is concerned that proposals to strengthen corporate governance in operating companies aren't appropriate for fund companies. In comments filed last month with the Securities and Exchange...

Fast Track: Fidelity itches to compete in clearing biz.(News)
May 12, 2003... Byline: Bruce Kelly Norm Malo says he understands the needs of a variety of broker-dealers, from independents to burgeoning regional firms. A veteran with 35 years' experience, the president of Fidelity Investments' New York-based...

One on One: "I don't want to chase the market with new products. I think we have a very good lineup".(News)
May 12, 2003... Byline: David Hoffman Delaware Investments in Philadelphia has been through the wringer over the past few years. In January 2000, the company, a subsidiary of Lincoln National Corp., hired Charles "Ed'' Haldeman Jr. to turn it around....

High-yield bonds make big comeback, but rally may be spent; Wall Street investing turns to junk.(News)
May 12, 2003... Byline: Aaron Elstein CNS It is one of those rare moments in Leon Wagner's 26 years on Wall Street. Virtually every investment he has made recently has gone up - a lot. His firm paid 68 cents on the dollar last July for bonds issued by...

Revenue drop spurs cost cutting; FPA feels pinch, but a gentle one.(News)
May 12, 2003... Byline: Rick Miller A drop in corporate revenue has put a financial squeeze on the Financial Planning Association. Three years into the market downturn, the Atlanta- and Denver-based organization says that for the first time, it has...

Has ambitious plans as an asset custodian; Bear Stearns struts its stuff for advisers.(News)
May 12, 2003... Byline: Brooke Southall Wall Street is taking some revenge on discount brokers. Bear Stearns & Co. Inc. and Merrill Lynch & Co. Inc. are getting serious about swatting their pesky competitors aside to win custody of assets controlled...

Monday Morning: A lie, and a passel of sleeping dogs.(News)
May 12, 2003... Byline: Joe Cappo If you have any question about AMR Corp. chief executive Don Carty deserving his forced resignation from the parent of American Airlines Inc., you probably didn't hear this: "As you would expect under the...

Must planners take road from perdition? As with CPA, it may take crisis to gain respect.(News)
May 12, 2003... Byline: Rick Miller The CPA designation turned a practice rife with no-accounts into a profession the public counts on. If it is true that history is destined to repeat itself, financial planners seeking to gain similar prestige might look...

Schwab wearing a new look; As adviser-friendly exec exits, broker takes on East Coast feel.(News)
May 12, 2003... Byline: Brooke Southall Last week, as Charles Schwab Corp. officially dispensed with its co-CEO designations for David S. Pottruck and Charles R. Schwab, the man many financial advisers had viewed as the company's third chief executive...

Now stepping into the spotlight: Directors' roles, executive compensation; Fund oversight, fees remain on radar.(America's Investment)
May 12, 2003... Byline: Frederick P. Gabriel Jr. Don't be surprised if mutual fund executives start brown-bagging it. Judging from recent disclosures, it's obvious many paychecks got smaller in 2002. However, the salary and bonus cuts...

At the Bell.(Late News)
May 12, 2003... National Financial planning an IPO National Financial Partners, a roll-up of small financial planners and estate counselors led by Citigroup Inc. CEO Sanford Weill's daughter, Jessica Bibliowicz, has filed to raise as much as $250 million...

Taking Sides: Broader definition of hedge fund investor can be limiting.(Opinion)
May 19, 2003... Retail investors should have access to hedge funds, but only through independent financial planners and investment advisers - and then only through funds of funds. At Washington hearings on hedge funds last week hosted by the Securities...

Wilmington Trust says it's time to buy equities; Firm points to signs of a market recovery.(News)
May 19, 2003... Byline: Bruce Kelly Although the market is more volatile than ever, investors should overcome any concerns about its gyrations and think about buying stocks, say strategists with Wilmington Trust Corp. in Delaware. That is because...

One on One: "Probably our greatest opportunity will be with Bank of America's own client base".(News)
May 19, 2003... Byline: Frederick P. Gabriel Jr. Robert H. Gordon, chief executive and president of Banc of America Capital Management LLC, is in the spotlight. Aside from his role at the investment management arm of Bank of America Corp., Mr. Gordon is...

Fast Track: Liberty's McQuaid stepping into big shoes.(News)
May 19, 2003... Byline: David Hoffman Liberty Wanger Asset Management LP in Chicago is one of the most respected money managers investing in small-cap stocks. But the man most responsible for the firm's reputation is leaving. Effective Sept. 30,...

At the Bell.(Late News)
May 19, 2003... Advice legislation faces uncertainty Some Washington lobbyists say it isn't certain that the Senate Finance Committee will approve legislation allowing mutual funds to give investment advice. The House of Representatives approved last...

Street Wise: Taking a chance on high-yield corporate debt.(The Markets)
May 19, 2003... Byline: Jeff Benjamin High-yield corporate debt is getting hotter, and there is plenty of it. But is it a wise investment? Brian Good, who manages two mutual funds loaded up with more than $700 million in below-investment-grade...

Reverse Spin: The ardor cools for Fleet and Hancock.(Briefs)
May 19, 2003... Byline: Frederick P. Gabriel Jr. It looks like a cross-cultural courtship in Boston is over. FleetBoston Financial Corp. and crosstown paramour John Hancock Financial Services Inc. were engaged in serious merger talks until a month...

Tax Watch: Looming, booming federal budget deficits.(News)
May 19, 2003... Byline: Mark Battersby The Congressional Budget Office has announced that this year's federal deficit will exceed $300 billion - the largest ever. According to the budget analysis, which was released May 9, the federal deficit reached...

Product Watch: AmEx adds large-cap fund, two growth offerings.(News)
May 19, 2003... American Express Financial Advisors Inc., a Minneapolis-based unit of American Express Co. of New York, has launched three mutual funds: a quantitative large-cap-equity fund managed by American Express, and two American Express Partners mutual...

Phantoms and bonds; Weaker market may bring gains tax for funds.(News)
May 19, 2003... Byline: David Hoffman The infamous tax on phantom capital gains, usually an issue with equity mutual funds, could be a problem for bond mutual funds this year. That's because much of the positive returns generated by such bond funds -...

Providers, eyeing 401(k) sales, add fee-based option; Pitching small businesses will be tough, experts say.(News)
May 19, 2003... Byline: Rick Miller Major providers of retirement plans are targeting fee-based advisers in an effort to sell 401(k) plans to smaller businesses. While these plans have normally been sold through commission-based brokers and registered...

SRO for fund industry is `dead in the water'; Insiders say the concept won't be resurrected either.(News)
May 19, 2003... Byline: Sara Hansard The idea of a self-regulating organization for mutual fund companies is as dead as Jacob Marley. And for the time being, there is little chance its ghost will haunt the industry. The possibility of setting up one...

What's old (hat) could soon be new again; Hype slowly building for tech stocks, funds.(News)
May 19, 2003... Byline: Brooke Southall After three years of a market downturn, promoters of tech stocks and mutual funds are stirring to life and sallying forth with exuberant but careful presentations for a skeptical public. At a press briefing at...

Datebook.(Calendar/Datebook)
May 19, 2003... MAY 20-21 - Two-day IRA Workshop, BISYS Retirement Services. Ann Arbor (Mich.) Crowne Plaza. (800)346-3860. 20-21 - Two-day IRA Workshop, BISYS Retirement Services. Hawthorn Inn and Suites, Brainerd, Minn. (800)346-3860. 21-23 -...

At Issue; A strategy combining the wheat and the chaff.(Letters)
May 19, 2003... Throughout the bull market, I became increasingly concerned with the unrelenting focus on stocks. The value of true portfolio diversification, "the great free lunch,'' was ignored. Your article [Monday Morning, May 5] displays the epiphany that...

NAPFA to make run for settlement cash; Money would be used to highlight `fee-only'.(News)
May 19, 2003... Byline: Frederick P. Gabriel Jr. The organization representing fee-only financial planners hopes to get its hands on a piece of the recent $1.4 billion conflict-of-interest settlement between major Wall Street firms and regulators. The...

Insurers can rule retirement income market; But first they must make some changes.(News)
May 19, 2003... Byline: David Hoffman In order to dominate the financial services industry, insurance companies must make a few changes to the way they do business. That is the conclusion of two recent studies. Both studies say a new retirement...

Commissions still alive; Movement toward fee-based advice is real, but obstacles exist.(News)
May 19, 2003... Byline: Jeff Benjamin Fee-based financial advice, which represents less than 30% of revenue at the wirehouses, is expected to take over as the new industry standard within five years. But don't count out commissions yet. At issue,...

Conference Call: Corzine, Baker push securities law reform.(News)
May 19, 2003... Byline: Sara Hansard Two members of Congress who sit on financial committees say an overhaul of securities regulations is long overdue. Speaking at the New York-based Security Traders Association's seventh annual Congressional...

Short Interests: Hedge fund investors duck for cover.(Briefs)
May 19, 2003... Byline: Jeff Benjamin, Rick Miller and Sara Hansard Hedge fund investors are playing it close to the vest by pouring money into some of the more conservative absolute-return strategies. According to a recent survey of hedge fund...

Moving Up.(News)
May 19, 2003... * The Glenmede Trust Co. in Philadelphia has appointed Gordon B. Fowler Jr., 43, chief investment officer and senior vice president. Mr. Fowler will be responsible for all investment policy and research. Mr. Fowler was chief investment...

Schwab fund fees making few waves; New per-position charge also draws little flak.(News)
May 19, 2003... Byline: Brooke Southall Charles Schwab & Co. Inc. will impose a new fee on its mutual fund transaction-fee platform this summer, at a time when advisers, fund companies and investors are most sensitive to price shocks. Yet if the past...

Taking Sides: Give phantom-gains tax the boot.(Opinion)
May 19, 2003... While Congress is debating tax cuts and dividend tax reform, it should correct a major tax inequity for mutual fund investors: the phantom-capital-gains tax. Each year, this tax hovers over those who invest in mutual funds outside of...

Pru-Wachovia deal shows signs of strain; Scrutiny by exchange, defections latest woes.(News)
May 19, 2003... Byline: Bruce Kelly As the heads of Wachovia Securities Inc. in Richmond, Va., and Prudential Securities Inc. in New York crisscross the continent, touting their recent merger, there are signs of strain emerging in Prudential's brokerage...

Monday Morning: Portfolio disclosure proposal is on target.(News)
May 19, 2003... Byline: Samantha Chang Mutual fund companies are being pressed to act on a dizzying array of issues in the wake of the noisy scandals that have rocked Wall Street. New regulatory initiatives, covering issues ranging from proxy...

At the Bell.(Late News)
May 26, 2003... Prudential losing brokers in droves * Prudential Securities Inc. of New York has been hemorrhaging brokers since a merger with Wachovia Securities Inc. of Richmond, Va., was announced in February, sources inside and outside of Pru say. ...

Deferred comp lives; Spared in tax bill, but new attacks are likely.(News)
May 26, 2003... Byline: Sara Hansard Congress has once again spared executive deferred-compensation plans, but they will be targeted for attacks in other legislation later in the year. The Senate's version of the tax bill included a provision that...

One on One: "The SEC shouldn't mandate that all hedge funds become mutual funds".(News)
May 26, 2003... Byline: Jeff Benjamin From Charles Gradante's perspective, there is no single best answer when it comes to the issue of regulatory oversight of the hedge fund industry. The 57-year-old managing principal and chief investment officer of...

Monday Morning: Sector overvaluation is in the making.(News)
May 26, 2003... Byline: Mike Clowes One would think that the financial sector stocks would be languishing, given all the bad press over the past 12 months. One might expect that the conflict-of-interest scandals, the threats of lawsuits arising from...

Moving Up.(News)
May 26, 2003... * Gartmore Global Investments Inc. in Conshohocken, Pa., has named J. Chris Meyer, 49, senior vice president, marketing. Mr. Meyer, a 17-year veteran of the financial services industry, most recently was a consultant for Gartmore on product...

Concern about deflation may be inflated; Greenspan aside, confidence abounds.(News)
May 26, 2003... Byline: Vineeta Anand and Fred Williams Mild inflation is more likely than deflation, despite Federal Reserve Board Chairman Alan Greenspan's warning. That's the feeling of most of the economists, investment strategists and...

At Issue; Exercising franchise a satisfying workout.(Letters)
May 26, 2003... I am probably a rare person, if you are right in surmising that most investors toss proxy statements aside until it is too late to vote on them [Monday Morning, April 28]. I always vote shareholder proxies. I have never missed a vote. I...

Reverse Spin: Veep comes through on tax cut vote.(Briefs)
May 26, 2003... Byline: Caitlin Mollison So the vice president really is alive! Dick Cheney cast the tie-breaking vote in the Senate on Friday morning to pass the $350 billion tax cut bill. The final tally was 51 to 50. Passage in the Senate...