Investment News articles from October 2003

Investment News archives from October 2003

Short Interests: Lincoln sees Eagle partnership as a touchdown.(News)
October 6, 2003... Byline: Michael Ferrarella, Bruce Kelly and Rick Miller Lincoln Financial Group isn't concerned about the Philadelphia Eagles' slow start this season and what it means for the company, given that the National Football League team plays at...

Advisers rarely conduct client surveys; Study shows just 1% ask for feedback.(News)
October 6, 2003... Byline: Rick Miller A troubling omission by financial advisers is that few ask clients the simple question: How am I doing? Just 1% of advisers conduct client surveys, according to research by Charles "Chip'' Roame, managing principal...

One on One: "One of the themes clearly is fee transparency".(News)
October 6, 2003... Byline: Sara Hansard Paul Roye has had five tough years as the nation's chief mutual fund regulator. During that time, the director of the Securities and Exchange Commission's division of investment management has weathered a slumping...

Wall Street's lament: Market's up, jobs aren't; Some see more layoffs, others say hiring is picking up.(News)
October 6, 2003... Byline: Bruce Kelly The market has been up for the past year, but looking for work on Wall Street is still extremely daunting. Hiring by investment banks, money managers and broker-dealers remains a mixed bag. Some see the potential...

To many, Patriot game's no cinch; Advisers overengaged in complying with act.(News)
October 6, 2003... Byline: Rick Miller The USA Patriot Act has had some unintended consequences for financial advisers. Case in point: Last month, a client of Mike Kresh, a registered representative affiliated with Royal Alliance Associates Inc. of New...

Inability to market disability policies has insurers scrambling; Simplifying the plans is one of their strategies.(News)
October 6, 2003... Byline: Rick Miller Insurers have hit a wall when it comes to selling disability income insurance through financial advisers, but they're trying to deal with problems by simplifying the product and addressing other complaints. Though...

Fast Track: Helping close Northern's generation gap.(News)
October 6, 2003... Byline: Rick Miller Who says you can't teach an old trust bank new tricks? Bill Knapp, a self-proclaimed "champion of asset allocation,'' plans to do just that at one of the nation's oldest, most storied - and, some may add, stodgiest...

Conseco finds buyer for its struggling fund unit.(News)
October 6, 2003... Byline: David Hoffman Conseco Inc. is selling its troubled retail fund business to Managers Funds LLC of Norwalk, Conn. An announcement by the buyer, an affiliate of Boston-based Affiliated Managers Group Inc., pegged retail assets...

At Issue: Seeking to clarify an 'inexcusable' inaccuracy.(Letters)
October 6, 2003... In the Sept. 15 issue of InvestmentNews, I was quoted and paraphrased in the article "No easy fix as scandal tarnishes an industry.'' At one point, the article states, "[Ken Gregory] says the majority of mutual funds are amoral in their...

Tax Watch: The 'Wall Street rule' isn't a rule of law, the IRS insists.(News)
October 6, 2003... Byline: Mark Battersby The so-called Wall Street rule is a concept commonly used in the securities market and often discussed as federal tax policy. According to Emily Parker, the acting chief counsel of the Internal Revenue Service,...

Datebook.(Calendar/Datebook)
October 6, 2003... OCTOBER 7 - Integrating Hedge Funds into Private Wealth Strategies, Association for Investment Management and Research. Newport Beach (Calif.) Marriott Hotel and Tennis Club. (800)247-8132 or aimr.org. 8 - Best Practices for Fair...

Product Watch: Pershing offers brokerage clients a planning tool.(News)
October 6, 2003... Pershing LLC in Jersey City, N.J., a member of BNY Securities Group and a subsidiary of The Bank of New York Co. Inc., will provide its introducing-broker-dealer customers with access to NaviPlan Standard, a financial planning tool. This...

Moving Up.(News)
October 6, 2003... * Waddell & Reed Asset Management Group, a division of Waddell & Reed Investment Management Co. in Overland Park, Kan., has promoted Nikki Newton, 32, to senior vice president and director of defined benefits, from vice president, marketing and...

Comfort zone for planners; Registration may add to hedge funds' appeal.(News)
October 6, 2003... Byline: Sara Hansard Registration of hedge funds, which the Securities and Exchange Commission is likely to require, could make financial planners more comfortable investing in them. An SEC staff report released last week recommended...

At the Bell.(Late News)
October 6, 2003... State St. managing separates for UBS * State Street Global Advisors Inc. in Boston has entered into an exclusive one-year agreement with UBS Financial Services Inc. in New York to manage a long/short core equity strategy for managed...

Reverse Spin: Critic of 'grotesque' pay buys an example.(Briefs)
October 6, 2003... Byline: Frederick P. Gabriel Jr. Looks like the Canadians have got a bit of a pay pickle on their hands, eh? In a deal that will create the second-largest life insurer in North America, Toronto-based Manulife Financial Corp. said last week...

Broker offers peers access to bond desk.(News)
October 6, 2003... Byline: Bruce Kelly One independent broker-dealer is working to build on its recent success of opening a fixed-income desk and expand its offerings to other independent and regional firms that lack in-house bond trading departments. ...

But who's watching the fund watchers? Morningstar stance spotlights rivals' conflicts.(News)
October 6, 2003... Byline: Frederick P. Gabriel Jr. The debate over whether investors should bail out of mutual funds run by scandal-tainted companies raises serious questions about the conflicts facing those making recommendations. While such venerable...

Conference Call: Fund industry draws more congressional heat.(News)
October 6, 2003... Byline: Sara Hansard Leaders of the Senate Banking Committee last week took aim at the mutual fund industry, bolstering chances that the Senate may join the House in trying to enact legislation that increases federal regulation of the $7...

Debate over funds' proxy role gathers steam; Some would restrict voting to the board.(News)
October 6, 2003... Byline: David Hoffman The debate over who is best qualified to cast proxy votes - mutual fund boards or fund management - is heating up. It is a question that will get more attention with the approach of the Aug. 31, 2004, deadline for...

Taking Sides: Mutual funds and hedge funds could prove to be a toxic blend.(Opinion)
October 6, 2003... Some mutual fund companies have established their own hedge funds, but the reach for increased profits is potentially dangerous to both the firms and mutual fund investors. The development sets up possible conflicts of interest within the...

Subadvisers headed for a price war?(News)
October 6, 2003... Byline: Frederick P. Gabriel Jr. It is getting tougher to make a buck in the world of subadvised mutual funds. Growth in the number of asset management companies offering to manage money for other companies, coupled with continued...

This return a total shock to planner; Feline finds his way home after 10 years.(News)
October 6, 2003... Byline: Brooke Southall A black cat crossed the path of a Silicon Valley financial planner again two weeks ago, and the two of them are enjoying a moment in the sun. Christopher Inglis, 44, co-branch manager of the Redwood City,...

Janus, Strong pressed at home; Face local scrutiny in wake of charges.(News)
October 6, 2003... Byline: Brooke Southall With Eliot L. Spitzer breathing down their necks, Strong Capital Management Inc. and Janus Capital Group Inc. are facing some of the toughest national scrutiny in their history. But as the investigations by the...

Street Wise: Fiduciary fund believes in second chances.(The Markets)
October 6, 2003... Byline: Jeff Benjamin From where S. Mackintosh Pulsifer sits, the economic outlook is bright, and he has set his portfolio accordingly. Mr. Pulsifer, the New York-based portfolio manager of the Fiduciary Large Cap Growth & Income Fund...

Monday Morning: Generation Y has money, needs advice.(News)
October 6, 2003... Byline: Jim Pavia With increased competition in the financial services industry, discovering untapped sources of potential customers has become more important than ever. College students and recent graduates represent a great...

Datebook.(Calendar/Datebook)
October 13, 2003... OCTOBER 14 - The PIPEs Conference: A Forum For Direct Investments in Public Companies, Friedland Events and The PIPEs Report. Crowne Plaza, New York. (646) 435-4069. 14-15 - Managed Account Solutions, Money Management Institute....

Hedging without a hedge fund; SSgA-UBS strategy unique for separates.(News)
October 13, 2003... Byline: Jeff Benjamin Hedging without the hassles of a hedge fund has found its way into the separately managed accounts industry. State Street Global Advisors Inc. in Boston has entered into an exclusive one-year agreement with UBS...

SIPC cans examiner for ethics breach; Agency alleges he accepted payments.(News)
October 13, 2003... Byline: Rick Miller In a first since its creation by Congress in 1970, the Securities Investor Protection Corp. in Washington has fired an examiner for violating the quasi-public agency's business ethics policy. Donald Scott, an SIPC...

With fund fees, devil is in the details; SEC effort falling short, experts say.(News)
October 13, 2003... Byline: David Hoffman The Securities and Exchange Commission is on the right track when it comes to proposed mutual fund industry reforms, but it still has a way to go when it comes to fund fees. That is the impression some industry...

Advisers' lobbying prompts rare do-over; Senate panel taking new look at COLI bill.(News)
October 13, 2003... Byline: Sara Hansard After causing sales of corporate-owned life insurance policies to come to a screeching halt, the Senate Finance Committee this week is set to take the unusual action of reconsidering legislation it recently approved....

Mutual funds may soon feel proxy pressure; SEC plan would boost shareholders' clout.(News)
October 13, 2003... Byline: Sara Hansard Flying under the radar screen of operating companies, mutual funds may come under greater pressure to get more involved in proxy nominations of company directors under a proposal issued last week by the Securities and...

Monday Morning: History less of a guide this time around.(News)
October 13, 2003... Byline: Mike Clowes A few days after I wrote my last column, which argued that the market recovery still has some way to go, Ken Safian, a veteran analyst and asset manager, said, in effect: "Not so fast.'' My arguments were based on...

One on One: "I think the market goes higher before we get a really significant downturn again".(News)
October 13, 2003... Byline: Bruce Kelly Joseph McAlinden, chief investment officer for Morgan Stanley Investment Management in New York, has a clear message for retail brokers and clients: In the wake of three consecutive down years for stocks, stick to your...

Fast Track: Janus operations chief has his hands full.(News)
October 13, 2003... Byline: Brooke Southall It has been on-the-job draining for Girard C. Miller since he joined Janus Capital Group Inc. on July 7. As the person filling the newly created position of chief operating officer at the embattled mutual fund...

The next wunderkinder? Teen hedgers giving a new meaning to `masters of the universe'.(News)
October 13, 2003... Byline: Rick Miller At a time when many teenagers are starting college and getting serious about the opposite sex, Edric Caballero and Brandon Stewart are starting a hedge fund and getting serious about managing millions of dollars. ...

Uncertainty sparks unity for audit panels; New association seeks to cut through confusion.(News)
October 13, 2003... Byline: David Hoffman Audit committees for mutual funds are finding that they have to take action that may not be required by law to protect themselves from violating their fiduciary duty. At a conference in New York held by the Mutual...

Top independent firms are blocking the exits; H.D. Vest stops block transfers; others likely to follow.(News)
October 13, 2003... Byline: Bruce Kelly Independent broker-dealers are grappling with what may turn into another major hurdle facing brokers looking to change firms. Industry watchers say several independent broker-dealers, including H.D. Vest Financial...

Forget hottest funds; try beasts of the least; Chasing sector of the moment not a good idea.(News)
October 13, 2003... Byline: Frederick P. Gabriel Jr. For those who want to avoid another disastrous ride on the technology mutual fund bandwagon, it is time to unearth some ugly ducklings. With the Standard & Poor's 500 stock index, the Dow Jones...

At the Bell.(Late News)
October 13, 2003... An Illinois planner makes acquisition * Leonetti & Associates Inc., a fee-only financial planning firm in Buffalo Grove, Ill., this week will formally announce its recent acquisition of Successful Financial Solutions Inc., a Northbrook,...

Street Wise: Ambulatory-services provider is up and walking.(The Markets)
October 13, 2003... Byline: Jeff Benjamin Wall Street has long since abandoned Rural/Metro Corp. (RUREC), but that doesn't necessarily mean all hope is lost for the Scottsdale, Ariz., provider of ambulatory services. A classic roll-up that spent much of...

Reverse Spin: SEC defends turf with fund crackdown.(Briefs)
October 13, 2003... Byline: Rick Miller Not to be overshadowed by a renegade attorney general, the Securities and Exchange Commission plans to propose rules next month to crack down on mutual fund trading abuses. SEC Chairman William H. Donaldson said...

Moving Up.(News)
October 13, 2003... * Hornor Townsend & Kent Inc., the broker-dealer subsidiary of Penn Mutual Life Insurance Co. in Horsham, Pa., has appointed several members of Penn Mutual's sales management team to leadership positions. Larry Mast, 55, already a director...

Taking Sides: For fund industry, action is key.(Opinion)
October 13, 2003... Facing intense public scrutiny for the worst scandal to hit their industry in 80 years, the nation's top mutual fund leaders have vowed to address ways to restore investor confidence. With all eyes on them, it is time to put up or shut up,...

Short Interests: Sunny days for some asset management firms.(News)
October 13, 2003... Byline: Michael Ferrarella, Sara Hansard and Brooke Southall A recent survey by McKinsey & Co. has found that despite a difficult stock market and competitive conditions in 2002, some leading asset management firms achieved profit margins...

District court makes right call on `do not call'.(Opinion)
October 13, 2003... A federal appeals court last week let the Federal Trade Commission enforce its do-not-call registry against telemarketers while the agency appeals U.S. District Judge Edward Nottingham's ruling that declared the registry unconstitutional, as...

Tax Watch: Ex-IRS counsel warns on shelter enforcement.(News)
October 13, 2003... Byline: Mark Battersby A former Internal Revenue Service chief counsel warns that the agency could lose its war on tax shelters if enforcement becomes an overriding goal. At a tax shelter conference sponsored by BNA Tax Management in...

Financial Engines revs up effort to go after advice clients itself; Aims to leverage its entree to 401(k) participants.(News)
October 13, 2003... Byline: Brooke Southall Financial Engines Inc. is gearing up to offer a higher level of financial advice - at a higher price, of course. The Palo Alto, Calif., company is looking to fill a void left by traditional financial...

Custodians battle for share of assets; Stiff competition follows three years of stagnation.(News)
October 20, 2003... Byline: Brooke Southall After three years of stagnation and frustration, the companies that keep the assets for registered investment advisers are off to the races. Fidelity Investments of Boston added $15 billion to its institutional...

One on One: "You are seeing money come into this industry from all over the world".(News)
October 20, 2003... Byline: Jeff Benjamin When it comes to the notion of increased regulatory oversight of the hedge fund industry, Tremont Capital Management Inc.'s Robert I. Schulman politely states that the Securities and Exchange Commission can bring it...

Advisers help investors stay the course on stocks; 63% have clients who suggested divesting.(Industry Attitudes)
October 20, 2003... Byline: David Hoffman Financial advisers are doing a good job of looking out for their clients. At least that is the way some advisers interpret the data from an InvestmentNews survey conducted over the summer. More than...

Taking Sides: Corporate-board elections shouldn't resemble Soviets'.(Opinion)
October 20, 2003... The Securities and Exchange Commission must make it easier for corporate shareholders to nominate and elect directors of the public companies in which they have invested. At present, the election of corporate directors closely resembles...

Fast Track: Spreading the financial planning gospel.(News)
October 20, 2003... Byline: Bruce Kelly Bruce Wolfe, director and executive vice president with Webster Financial Advisors in Stamford, Conn., looks at recent deals by parent Webster Financial Corp. and sees plenty of opportunities. This month, Webster...

What a difference a year makes: Adviser satisfaction rises; Guarded optimism as market rebounds.(Industry Attitudes)
October 20, 2003... Byline: Frederick P. Gabriel Jr. While no one is popping champagne corks and raising their glasses to a revival of fortunes, financial advisers are a decidedly less pessimistic bunch this year. The third annual Industry Attitudes...

Waterhouse shines among asset custodians; Says survey puts it 1st in 6 of 7 categories.(News)
October 20, 2003... Byline: Brooke Southall TD Waterhouse Institutional Services is a distant third to its two larger rivals in size. But the results of an industry survey may help explain how the firm's custody asset holdings jumped to about $24.7 billion in...

Monday Morning: Jumping over college tuition hurdles.(News)
October 20, 2003... Byline: Jim Pavia One of the best services a financial adviser can provide is to ease the stress level for parents with college-bound kids, and advisers who help one family may find that they get more business via word of mouth. When...

At the Bell.(Late News)
October 20, 2003... FPA exec to head indy broker spinoff * A Financial Planning Association steering committee established to form an independent broker-dealer association voted last week to name the FPA's Dale Brown as its executive director and chief...

Street Wise: Small-cap fund's secret: Luck and 'a lot of insight'.(The Markets)
October 20, 2003... Byline: Jeff Benjamin Twelve months after launching the Touchstone Small Cap Growth Fund (TESAX), Patrick Bannigan, president of Touchstone Advisors Inc. in Cincinnati, is looking back on what he calls "a little bit of luck and a lot of...

Moving Up.(News)
October 20, 2003... * Turner Investment Partners Inc. in Berwyn, Pa., has hired Daniel R. McFadden, 43, as director of client services. He will be responsible for coordinating the investment process, strategies and performance, and clients' needs and feedback. ...

Short Interests: More Americans optimistic about financial future.(News)
October 20, 2003... Byline: Rick Miller, Bruce Kelly and Sara Hansard Americans are more confident in their financial future than they were a year ago, but not by much. According to a July survey of more than 1,000 adults released by the Atlanta- and...

Advisers stick with value as growth stocks surge; Expecting big gain in small-cap group.(News)
October 20, 2003... Byline: David Hoffman Growth stocks are outperforming value stocks, but you wouldn't know that by looking at where some financial advisers are putting their clients' money. The advisers are sticking with value investments even though...

Wrap tune: Call me not responsible; Contracts seen as a CYA move by brokers, money managers.(News)
October 20, 2003... Byline: Jeff Benjamin Exactly where the buck stops is emerging as a potentially hot issue with separately managed accounts. As the wildly popular separates industry has ballooned to more than $450 billion in assets under management,...

Tax Watch: Policy clarified on taxing of foreign dividends.(News)
October 20, 2003... Byline: Mark Battersby The Department of the Treasury and the Internal Revenue Service have issued notices covering the taxation of dividends paid by foreign corporations under the provisions of the Jobs and Growth Tax Relief...

An asset class to make retirees GRIn; Lets them turn 401(k)s into pension plans.(News)
October 20, 2003... Byline: Brooke Southall An entrepreneur presented a safety-and-income financial product in Washington last week, and some analysts say it may be the most novel one in more than a decade. Francois Gadenne, president and chief executive...

Advisers rate president solid on the economy; A plurality gives Congress just a C.(Industry Attitudes)
October 20, 2003... Byline: Sara Hansard President Bush's approval ratings may be down, but financial advisers still basically like his administration. That is among the findings contained in the latest InvestmentNews survey of advisers. Asked to...

Optimism on the market abounds among advisers; Clients not sold on bullishness, however.(Industry Attitudes)
October 20, 2003... Byline: Jeff Benjamin Financial advisers in general appear to be loving life once again. Not all their clients, however, are as eager to jump back into the market. More than 88% of the advisers polled by InvestmentNews' third annual...

Datebook.(Calendar/Datebook)
October 20, 2003... OCTOBER 21 - Sovereign Debt: Valuation and Risk, Fixed-Income Analysts Society Inc. New York Helmsley Hotel. fiasi.org 21-22 - Seventh annual Performance Presentation Standards Conference, Association for Investment Management and...

Reverse Spin: Alger latest firm in mutual fund probe.(Briefs)
October 20, 2003... Byline: Frederick P. Gabriel Jr. One man's trash is another man's ticket to jail. James Connelly Jr., a former vice chairman at New York money manager Fred Alger Management Inc., on Thursday pleaded guilty to evidence tampering in the...

Product Watch: Tool aids compliance with USA Patriot Act.(News)
October 20, 2003... PFPC Inc., a member of Pittsburgh-based PNC Financial Services Group Inc., has unveiled a service designed to help mutual fund clients satisfy customer-identification-program regulations issued under the USA Patriot Act. The regulations...

Protectionist Florida insurance law bites dust; It is unconstitutional, federal court rules.(News)
October 20, 2003... Byline: Sara Hansard The insurance industry won a big victory in its fight to remove protectionist barriers when a federal court recently struck down Florida's much-maligned countersignature law. The U.S. District Court in Tallahassee...

Don Giovanni? The Marriage of Figaro? It may be helpful to place Wall Street morality plays in the context of "opera buffa.''.(Opinion)
October 20, 2003... Byline: William Berg Early in September, New York Attorney General Eliot L. Spitzer filed a complaint on behalf of the state against certain hedge funds and their managing principals, alleging that the hedge funds had engaged in various...

Nasdaq's bid to become an exchange debated; Senate Banking Committee criticizes SEC for delay.(News)
October 20, 2003... Byline: Sara Hansard William H. Donaldson, chairman of the Securities and Exchange Commission, came under pressure last week from Senate Banking Committee members to act on the Nasdaq Stock Market Inc.'s application to register as a stock...

At Issue: If it's based mainly on age, it's asinine allocation.(Letters)
October 20, 2003... Finally, someone [Monday Morning, Aug. 18] agrees with me. For years, I thought asset allocation based primarily on age was totally out of whack. Yet all of the literature and speeches I have sat through for many many years almost...

Advisers wary of hike in redemption fees; Market timing isn't only factor, they say.(News)
October 20, 2003... Byline: Sara Hansard Financial advisers are wary of the possibility of higher redemption fees, a measure being pursued by the mutual fund industry as a way of discouraging short-term trading. The fund industry is considering asking the...

ICI task forces spark skepticism; The expected lack of a formal report seen as problematic.(News)
October 20, 2003... Byline: Frederick P. Gabriel Jr. Facing investor mistrust and pressure from Washington, the mutual fund industry's powerful lobby insists that it is taking steps to curb late-trading and market-timing abuses. But those steps are likely...

Annuitizing retains edge, a study says; But advantage would be less if tax cut were extended.(News)
October 20, 2003... Byline: Rick Miller As it opens its 12th annual meeting today in Washington, the National Association for Variable Annuities will unveil a study showing that annuitization still has an edge over systematic withdrawals, even after passage...

Scandals aside, optimism has risen.(Industry Attitudes)
October 20, 2003... Happy days may not be here again quite yet, but financial advisers report being more satisfied with the profession than they were a year ago. Many also consider the bear market a positive for the industry. Nevertheless, scandals on Wall...

DFA `commissioned' to plant fee-only tree in Canada; Recruited by advisers north of the border.(News)
October 27, 2003... Byline: Brooke Southall The fee-only financial advisory model has taken root in Canada about as well as palm trees. But one money manager thinks that is about to change, and it is laying the groundwork to gather assets north of the...

Reverse Spin - Take a seat: The price has dropped.(Briefs)
October 27, 2003... Byline: Frederick P. Gabriel Jr. Here is a seat for the gilded tushy: The New York Stock Exchange on Tuesday reported that two regular exchange seats had been sold for $1.35 million each, down $500,000 from the last time a seat was sold,...

Street Wise: Medallion Financial steps on the accelerator.(The Markets)
October 27, 2003... Byline: Jeff Benjamin Medallion Financial Corp. (TAXI), a New York company that specializes in financing the taxicab industry, has discovered a much smoother ride in the way of Federal Deposit Insurance Corp. coverage. The FDIC-insured...

Latest mutual fund offers are reflecting old times; Trend-following results in conservative products.(News)
October 27, 2003... Byline: David Hoffman New mutual fund offerings this year offer slim pickings to the growth-oriented investor. Curiously, many of the funds introduced this year through the third quarter focus on conservative investments. The...

Datebook.(Calendar/Datebook)
October 27, 2003... OCTOBER 28-30 - Branch Manager Development Program, Securities Industry Association, Sutton Place Hotel, Chicago. (212) 618-0547 or sia.com. 29-30 - Networked Financial Services Forum, TowerGroup and Thomson Media. Roosevelt Hotel, New...

Banks look at flexible technology; Open architecture now targets affluent.(News)
October 27, 2003... Byline: Rick Miller Some of the nation's private banks are giving their wealthy clients something that less affluent investors have long taken for granted. Open architecture, the ability of financial institutions to offer third-party...

FPA's stance on disclosure disturbs brokers; Association wants additional rules.(News)
October 27, 2003... Byline: Sara Hansard The Financial Planning Association is taking an increasingly aggressive stand on regulations requiring more disclosures by broker-dealers on fund sales payments. Meanwhile, independent-broker members of the FPA aren't...