Investment News articles from September 2003

Investment News archives from September 2003

At the Bell.(Late News)
September 1, 2003... Insurers adding annuity options The Phoenix Cos. Inc. in Hartford this week is launching a flexible-premium deferred variable annuity without front-end or back-end sales charges. Called Freedom Edge, the adviser-sold annuity offers...

Tax Watch: Foreign tax issues are drawing the spotlight.(News)
September 1, 2003... Byline: Mark Battersby At the same time that Rep. William M. Thomas, R-Calif., chairman of the House Ways and Means Committee, was touting his export tax bill's relief for domestic manufacturers, tax experts around the world were advising...

Janus wholesale shift: Drops RIA-only policy; Fund giant insists it's not abandoning advisers.(News)
September 1, 2003... Byline: David Hoffman Salespeople who pitch products only to independent registered investment advisers may soon become a thing of the past. At least that's what some analysts and advisers are saying after learning that over the past...

Hedge fund assets hit record $665B; Equity markets fueled second-quarter surge.(News)
September 1, 2003... Byline: Christine Williamson Assets invested in hedge funds hit a record $665 billion at the end of the second quarter, fueled by stronger equity markets, according to new studies. Hedge Fund Research Inc. in Chicago reports that while...

One on One: "Advisers talk to one another, and if you've got a good product, that spreads like wildfire".(News)
September 1, 2003... Byline: Jeff Benjamin Joseph F. Ready is the engineer behind a four-year push by what is now Wachovia Corp. into the retirement plan market by way of the financial intermediary. About a third of Wachovia's $55 billion in retirement...

It's time to overhaul SEC's fine-collecting.(Opinion)
September 1, 2003... The Securities and Exchange Commission has collected only $190 million of the $480 million in fines it levied from 1997 to 2002, according to a report by the General Accounting Office. A majority of those shortfalls stem from a few large...

Taking Sides: Deflation scare losing air.(Opinion)
September 1, 2003... Though the Federal Reserve still professes to be concerned about the possibility of deflation shrinking the economy, most economists and chief investment officers seem to be discounting the likelihood. In fact, investors also seem to have...

Monday Morning: Keeping the clients' liabilities in mind.(News)
September 1, 2003... Byline: Mike Clowes The key question for financial planners isn't: What should the client's long-term asset allocation be? Nor is it: What will be the long-term rate of return on stocks? The big question is: What are the investors...

Street Wise: Mixing value investing with solid due diligence.(The Markets)
September 1, 2003... Byline: Jeff Benjamin Rick Johnson keeps his portfolio loaded with high-quality stocks and pays particular attention to those of lower quality. He is simply intent on justifying every stock he places in the Columbia Special Fund...

Fast Track: New Lincoln marketing VP pushes holistic approach.(News)
September 1, 2003... Byline: Jeff Benjamin Shipley Munson is a hot spring of enthusiasm. Ask him about his new job as vice president of campaign marketing with Lincoln Financial Distributors Inc. in Philadelphia and he's likely to go off on a tangent on...

Reverse Spin: Psst...Hey, kettle! It's the pot.(Briefs)
September 1, 2003... Byline: Frederick P. Gabriel Jr. Maybe Dick Grasso should consider changing his last name to Grosso. The New York Stock Exchange announced on Wednesday that Mr. Grasso's contract as chairman had been extended through May 2007 and that...

Don't you dare press that delete button! SEC case likely the first charging an adviser with destroying investment-related e-mail.(News)
September 1, 2003... Byline: Bruce Kelly Investment advisers had better think twice now before hitting the delete button on their e-mails. The Securities and Exchange Commission in July charged Schield Management Co. of Littleton, Colo., and its president,...

Dividend-focused funds are all the rage; Tax law changes are a key driver.(News)
September 1, 2003... Byline: Frederick P. Gabriel Jr. If there's one universal truth about the mutual fund industry, it's that it has never let an investment fad pass it by. Thanks to recent tax law changes and chaotic market conditions over the past three...

At Issue: To be honest, secrecy is not the best policy.(Letters)
September 1, 2003... Rosilyn Overton ("Brokers, if put on spot, could pressure firms,'' Aug. 4) is quoted as stating that full compensation disclosure might make clients "suspicious'' and that stockbrokers tend to be viewed as "evil.'' What strikes me as...

As BGI bulks up, SPDR-man sharpens bite; Sector-ETF pioneer revamps marketing.(News)
September 1, 2003... Byline: Brooke Southall Select Sector Standard & Poor's depositary receipts have lost their commanding market leadership in sector exchange-traded funds over upstart Barclays Global Investors. Barclays has 12 iShares Dow Jones sector...

Taking it with you is pricier; Pershing, AIG network tack on flight charges.(News)
September 1, 2003... Byline: Bruce Kelly The dominant player for clearing and custody of assets for independent broker-dealers has been telling customers that it's creating a new fee on accounts of brokers looking to change firms. And one leading independent...

Deflation scare is losing air; Advisers, investors no longer concerned.(News)
September 1, 2003... Byline: Brooke Southall Fears of deflation have been deflated. Investors - virtually in a matter of weeks - have forgotten about the threat of deflation, and financial advisers are crossing it off their list of worries. "It...

Datebook.(Calendar/Datebook)
September 1, 2003... SEPTEMBER 4 - CDO Analytics Symposium, Financial Research Associates LLC. Park Central New York. (800)280-8440 or frallc.com. 8-9 - Fall Forum 2003, Financial Planning Association of New Jersey. Hilton East Brunswick. (877)773-7265 or...

SSgA tries to ease impact of departures; Top managers among 136 accepting package.(News)
September 1, 2003... About 8%, or 136, of State Street Global Advisors Inc.'s employees accepted State Street Corp.'s enhanced severance package, a spokeswoman has confirmed. That amounts to about 5% of the 3,100 employees that accepted the enhanced severance...

Fund-of-funds managers hedge bets by registering; Use process to pull more business from institutions.(News)
September 1, 2003... Byline: Christine Williamson More and more hedge fund managers are registering their funds of funds as a way to bolster their institutional business, market experts note. That's because many hedge-fund-of-funds managers are close to -...

Wisconsin adviser takes on a new challenge; Moves to expand $300M planning firm into wealth management.(News)
September 1, 2003... Byline: Brooke Southall Vern Sumnicht is a one-man wrecking machine, according to those who know him best. He wears them out with his blizzard of ideas about wealth management. It's no coincidence, friends and colleagues say, that...

Short Interests: Holiday (stock) shoppers beginning to warm up.(News)
September 1, 2003... Byline: Brooke Southall and Frank Kelly As the beach weather has been good, says Jennifer Hanson, a research analyst at U.S. Bancorp Asset Management/First American Funds in Minneapolis, it's time to start your holiday shopping for stocks....

For more insurers, it's LTC ya later; Some companies already out, others eyeing exits.(News)
September 1, 2003... Byline: Jeff Benjamin Losses on long-term-care-insurance policies are driving insurance companies out of that business. At least three insurance providers stopped writing such policies during the first half of the year, and others,...

Fund firms rethinking hedge fund strategy; React to heightened scrutiny, volatile market.(News)
September 1, 2003... Byline: Frederick P. Gabriel Jr. Amid heightened scrutiny from regulators, concerns over conflicts of interest and an unpredictable stock market, mutual fund companies are rethinking their plans to rush into hedge funds. A few years...

Short Interests: Investors - when will they ever learn?(News)
September 1, 2003... Byline: David Hoffman How many times can investors get burned before they learn not to chase returns? That's what Kunal Kapoor, associate director of fund analysis at Morningstar Inc. in Chicago, is asking after reviewing the latest fund...

Monday Morning: Mutual fund industry in (fee) denial.(News)
September 8, 2003... Byline: Frederick P. Gabriel Jr. When it comes to fees, the mutual fund industry is swimming against the tide, and it's the shareholders who are getting soaked. At a time when everyone from auto salesmen to travel agents is under...

Execs eye year-end bonuses.(News)
September 8, 2003... Byline: Bruce Kelly Wall Street executives are growing more optimistic about receiving a bonus at the end of the year, according to a recent survey. And some of them think they are more likely to get a raise going into next year. ...

Time diversication + asset allocation: A winning combo, for the most part; "Good results require not only good math, but good planning and good sense.''.(Opinion)
September 8, 2003... Byline: Harold Evensky Over the last few years, InvestmentNews has included many articles incorporating criticism of "time diversification.'' However, faith in the salutary effect of time diversification on risk was not created from naive...

Other Views: Keeping taxes from becoming a drag; Unless you're careful, fixed-income investing can leave your clients in a fix.(Opinion)
September 8, 2003... Byline: Tom Roseen The investment experience has come full circle in the few short years since the 1900s ended - from irrational exuberance in technology stocks to corporate malfeasance, war and terrorism. And investment expectations have...

At Issue: Clients want financial fix on firm, not on broker.(Letters)
September 8, 2003... Your editorial ["Taking Sides,'' Aug. 18] concerns what I feel is an invasion of privacy. Why should brokerage firms be required to disclose the nature of their compensation for their executives and their registered representatives? ...

In vogue: Enhanced-index funds; Approach carefully, experts tell investors.(News)
September 8, 2003... Byline: David Hoffman Cash flows into enhanced-equity-index funds are picking up, but experts say investors should approach them with caution. In the second quarter, net flows soared to $451 million, from $40 million last year's second...

Linsco makes a move to other side of ledger; To provide consulting, record keeping for funds.(News)
September 8, 2003... Byline: Bruce Kelly A leading broker-dealer known for its dedication to independent financial advice has jumped into the lucrative managed-money business. Linsco/Private Ledger Corp. of San Diego and Boston last week launched the...

Street Wise: Financial services fund loves mortgage servicers.(The Markets)
September 8, 2003... Byline: Jeff Benjamin For Anton Schutz, manager of the $233 million Burnham Financial Services Fund (BURKX), it's all about dark clouds and silver linings. After defying the market's gravity during the past three years with gains of...

Fast Track: Sauter steps into uncharted territory as first Vanguard CIO.(News)
September 8, 2003... Byline: Frederick P. Gabriel Jr. Let's hope George U. "Gus'' Sauter's management skills are better than his timing. Mr. Sauter, 49, who joined The Vanguard Group Inc. two weeks before the stock market crash of 1987, was recently named its...

Reverse Spin: Goldman Sachs gets burned on tip.(Briefs)
September 8, 2003... Byline: Frederick P. Gabriel Jr. Perhaps someone should make it clear to the folks at The Goldman Sachs Group Inc. that they're not supposed to work for tips. The New York-based firm Friday agreed to pay more than $9.3 million to...

Another big player trims its commitment to LTC; CNA shifting focus to group side.(News)
September 8, 2003... Byline: Rick Miller In a sign of continuing upheaval in long-term-care insurance, one of the largest providers told agents last week that it is exiting the individual-policy business to focus on the group side. While CNA Financial...

Taking Sides: Stringent broker oversight would help to restore trust.(Opinion)
September 8, 2003... NASD has proposed that securities firms implement supervisory procedures for brokers who are the targets of repeated regulatory actions or customer complaints that may be a cause for concern. Officials say the proposed amendment is aimed at...

Short Interests: Ameritrade stocks its supermarket via bargains.(News)
September 8, 2003... Byline: Brooke Southall, Rick Miller and David Hoffman Ameritrade Advisor Services is raising its game by going low on fees, and mutual fund companies are flocking to its no-transaction-fee platform. The division of Omaha, Neb.-based...

Schwab study states case for sole custody; Finds that advisers who diversify pay steep price.(News)
September 8, 2003... Byline: Brooke Southall With $250 billion under custody and the 5,800 financial advisers it calls its own, Charles Schwab & Co. Inc. has to plug a lot of dikes. Schwab's advisers frequently move portions of their assets to competitors...

Product Watch: Fund education group adds four executive councils.(News)
September 8, 2003... The Mutual Fund Education Alliance has introduced new strategic initiatives that further support investor communication programs. The Kansas City, Mo.-based alliance has created four distinct executive councils: direct retail, intermediary...

Moving Up.(News)
September 8, 2003... * Allmerica Financial Corp. in Worcester, Mass., has named Frederick Eppinger, 44, president, chief executive officer and a director. Mr. Eppinger was executive vice president of property and casualty field and service operations for The...

At the Bell.(Late News)
September 8, 2003... ICI tells members: Get houses in order The Investment Company Institute, the mutual fund industry's main trade group in Washington, sent a letter to its members Friday urging them to double-check their internal policies and procedures in...

New software may aid suitability cases; Puts brokers' choices under a microscope.(News)
September 8, 2003... Byline: David Hoffman Lawyers aren't the only ones capitalizing on investor disgust regarding investment scandals and market losses. Overlap Inc. is culling information from software it designed to help advisers build diversified...

One on One: "We are now in a world where professional skill will be of extreme value to the public".(News)
September 8, 2003... Byline: Frederick P. Gabriel Jr. It's difficult to imagine what investors will miss most about Ralph Wanger when he retires in a few weeks: his stock picking or his irreverent sense of humor. Mr. Wanger is legendary for his...

Asset managers pressed to serve two masters; Public companies walking a tightrope.(News)
September 8, 2003... Byline: Rick Miller Managers of publicly traded assets serve two masters: their shareholders and their mutual fund customers. The trouble is, serving both causes inherent conflicts, says a Morningstar Inc. fund analyst. Fund...

Canary fallout commission-based; Advisers charging fees expect less damage from Spitzer probe.(News)
September 8, 2003... Byline: Frederick P. Gabriel Jr. If the allegations recently made by New York State Attorney General Eliot L. Spitzer are true, financial advisers may soon face a grave crisis of confidence among clients - or even worse, among themselves....

USA Patriot Act called no big deal for little guy; Compliance services rushing to market.(News)
September 8, 2003... Byline: Rick Miller As the date creeps closer for investment advisers to be required to make sure their clients aren't terrorists or money launderers, some companies are tailoring services to help them comply with future regulations. ...

Omnibus plan makes iShares viable for 401(k)s; New offering splits commissions.(News)
September 8, 2003... Byline: Brooke Southall Advisers can cross one more excuse off the list of why they can't manage 401(k) assets. That's because Darwin Abrahamson has found a way for them to use all 81 of the iShares from Barclay's Global Investors of...

Conference Call - Former SEC head to fund industry: Clean up your act.(News)
September 8, 2003... Byline: Jeff Benjamin Arthur Levitt remains as enthusiastic about righting what he views as wrongs in the financial services industry as he was during his tenure as chairman of the Securities and Exchange Commission. Speaking last week...

Calif. privacy law's bark worse than bite; Compromises to help brokers conduct business.(News)
September 8, 2003... Byline: Sara Hansard While California's enactment of the nation's strictest financial privacy law will make it more difficult for brokerage firms to market their products, the industry has won key compromises that will help broker...

Datebook.(Calendar/Datebook)
September 8, 2003... SEPTEMBER 10 - Creating a Pipeline of New Affluent Clients, Resource Network LTD. Venue TBA, New York. resourcenetworkltd.com. 12-13 - Sixteenth annual Mid-Atlantic Retreat, Financial Planning Association, Fairview Park Marriott, Falls...

Tax Watch: Rules on stock-based compensation are final.(News)
September 8, 2003... Byline: Mark Battersby The Department of the Treasury and the Internal Revenue Service have issued final regulations on the tax treatment of stock-based compensation where related-party transfer-pricing governing is used in qualified...

Mutual fund travels 'uncharted' territory; Hedge fund strategy may be a hard sell.(News)
September 15, 2003... Byline: David Hoffman The Technical Chart Fund opened its doors to new investors last week, but the average investor may be deterred by its complicated investment strategy. Matthew Rich, managing member of Kauser Management LLC, the...

Moving Up.(News)
September 15, 2003... * Gartmore Global Investments Inc. in Conshohocken, Pa., has named Richard A. Hein, 43, senior vice president of its separately managed accounts. He will be responsible for heading business development, as well as for distribution relationships...

Conference Call: D&O insurance underwriters feel under the gun.(News)
September 15, 2003... Byline: Sara Hansard Directors and officers of public companies are facing heightened scrutiny from insurance companies that issue liability policies covering them. Companies are also paying stiffer premiums for the vital business...

New regs likely on trading; Focus on stale pricing, after-hours trades.(News)
September 15, 2003... Byline: David Hoffman Expect big changes in the fund industry. That's what some industry experts have been saying since New York Attorney General Eliot L. Spitzer launched a probe of the trading practices of mutual funds. Mr....

No easy fix as scandal tarnishes an industry; Price for abusing investor trust seen to be high.(News)
September 15, 2003... Byline: Brooke Southall It doesn't matter what anyone thinks of the lawsuit Eliot L. Spitzer filed against four major financial companies; the bloom is off the rose. The mutual fund industry - like the brokerage industry and insurance...

Datebook.(Calendar/Datebook)
September 15, 2003... SEPTEMBER 16-17 - Money Fund Forum, IBC USA. InterContinental The Barclay New York. ibcusa.com. 16-17 - Competitive Challenges Conference, CRA Business Strategies Group. The New York Palace. (312)575-1823. 17-18 - Real Estate...

SEC chief calls for improved fund governance; He advocates a national securities regulatory mechanism.(News)
September 15, 2003... Byline: Sara Hansard Oversight of mutual fund governance needs to be improved, Securities and Exchange Commission Chairman William Donaldson last week told the Senate Banking Committee. At a hearing on the Sarbanes-Oxley Act on...

Taking Sides: With investor trust shaken, fund industry needs cleanup.(Opinion)
September 15, 2003... New York Attorney General Eliot L. Spitzer recently leveled some very serious charges against several big names in the mutual fund industry. Their actions allegedly enriched fund managers at the expense of investors, according to Mr. Spitzer....

Monday Morning: Patriot Act may have unforeseen impact.(News)
September 15, 2003... Byline: Jim Pavia The Department of Justice is completing a multicity public relations "roadshow'' promoting the controversial antiterrorism law known as the USA Patriot Act. It has basically become a debate of liberty versus security. ...

Insurers get message: Investors want guarantees, not market risk; Providers suffered when the long-term bank loan rate shrank to 1% and insitutional investors parked hot money in fixed annuities.(Opinion)
September 15, 2003... Byline: Mark Elzweig & Nancy Miller Not too long ago a friend of ours, a very successful sales team leader at a major insurer, was relaxing at home when he received an unexpected call from the president of his company. His first thought:...

Reverse Spin: AIG to shell out $10M in SEC case.(Briefs)
September 15, 2003... Byline: Frederick P. Gabriel Jr. And you think your cellphone bills are high? American International Group Inc., the New York insurer, agreed Thursday to pay $10 million to settle fraud charges for its role in alleged accounting...

Hedge probe may be boon for market-timing funds; SAAFTI members upset by Spitzer's remarks.(News)
September 15, 2003... Byline: Sara Hansard Allegations that several major mutual fund companies improperly allowed a hedge fund to time the market could be a blessing in disguise for true market-timing funds. At least that's what advisers who practice market...

Fast Track: He built it, now he sees to it that they will come.(News)
September 15, 2003... Byline: Brooke Southall Matthew J. Matrisian built a custody platform for independent advisers at Raymond James Financial Services Inc. Now he's switching gears to make sure this subspecies of advisers brings assets to his St....

Financial Profiles finding that less is more; Pares down software and finds success.(News)
September 15, 2003... Byline: Brooke Southall For Financial Profiles Inc. and its big insurance-centric broker-dealer customers, it was a matter of the technology getting better and better. The results, however, were getting worse and worse. But in a...

Tax Watch: Treasury issues tax treatment guidance.(News)
September 15, 2003... Byline: Mark Battersby The Department of the Treasury has issued proposed regulations that contain detailed rules on the tax treatment of contingent-payment debt instruments denominated in a foreign currency. Existing regulations...

Newcomer on managed-accounts fast track; Curian easing commission-based brokers into fee-based relationships.(News)
September 15, 2003... Byline: Jeff Benjamin Curian Capital LLC, the new kid on the block in the white-hot separately managed accounts industry, is looking to gain a foothold by taking this industry where its competitors have yet to tread. Some critics,...

Putnam's culture shift: Focus is on long term; Also trying to soften its tough corporate image.(News)
September 15, 2003... Byline: Frederick P. Gabriel Jr. Putnam Investments LLC is in the midst of a cultural revolution. Still smarting after bull-market bets on technology shares went bad, the 66-year-old firm is determined to shake its reputation for...

Out of bankruptcy, Conseco remains vulnerable; Stigma may block the road to recovery.(News)
September 15, 2003... Byline: Rick Miller Conseco Inc. emerged from bankruptcy last week slimmer and more streamlined, but it is still saddled with a name many associate with financial disaster. Regaining the confidence of consumers and independent...

Street Wise: Oral contraceptive may deliver for drug company.(The Markets)
September 15, 2003... Byline: Jeff Benjamin Barr Laboratories Inc. (BRL) continues to make strides toward expanding an already respectable 20% share of the oral-contraception market. The Woodcliff Lake, N.J., pharmaceutical company, which has built a...

LTC execs mull industry's future.(News)
September 15, 2003... Byline: Rick Miller With the continuing turmoil in the long-term-care-insurance industry, company executives attending the Disability Insurance and Long-Term Care Insurers' Forum this month wondered aloud when it would all end. "When...

Short Interests: Bringing a new Dynamic to adviser counseling.(News)
September 15, 2003... Byline: Michael Ferrarella and Rick Miller Holy Monte Carlo simulation, Batman! There is a new Dynamic Duo to meet the needs of the financial world. Deena Katz and Harold Evensky, the president and chairman, respectively, of Evensky Brown &...

Merrill to launch credit card.(News)
September 15, 2003... Byline: Bruce Kelly Merrill Lynch & Co. Inc. is continuing to expand the banking products its brokers can offer clients. Last week, the New York brokerage giant said it would soon add a credit card to its list of bank offerings. ...

At Issue: Investing with a convert hedger isn't the best bet.(Letters)
September 15, 2003... Re: your Aug. 11 editorial ["Letting funds hedge their bets can be a winner for investors''], be careful what you wish for. There is a long history of failure among managers of mutual funds in their attempts to run hedge funds. Forget Jeff...

FPA to help its brokers leave nest; Will support new group for independent firms.(News)
September 15, 2003... Byline: Rick Miller Recognizing that it's unable to fulfill the advocacy needs of its broker-dealer members, the Financial Planning Association has decided to help them create their own independent association. The Atlanta- and...

SEI's reach for the rich may exceed its grasp; Some wonder if retail brokerage is right move.(News)
September 15, 2003... Byline: Bruce Kelly SEI Investments Inc.'s plan to cater to top brokers and registered investment advisers who sell their funds of funds and separate accounts is taking shape, with a launch expected within a month. In a first for the...

At the Bell.(Late News)
September 15, 2003... PNC unit acquiring ADVISORport PFPC Worldwide Inc., a unit of Pittsburgh's PNC Financial Services Group Inc., is set this week to acquire Persimmon Research Partners Inc., the holding company for ADVISORport, according to sources familiar...

Bernstein amends policy portfolio mantra; Meeting liabilities is key, expert says.(News)
September 15, 2003... Byline: Joel Chernoff In a case of right church but wrong pew, Peter Bernstein says his doctrine wasn't fully developed when he said earlier this year that institutional investors should throw out the policy portfolio and return to market...

Product Watch: Schwab launches customized retirement advice.(News)
September 15, 2003... Charles Schwab & Co. Inc. in San Francisco has announced that it will offer comprehensive retirement advice at no additional charge to participants in defined-contribution plans. The offering will be available to participants in plans...

One on One: "We do a lot of things to mitigate a lot of risk".(News)
September 15, 2003... Byline: David Hoffman Smaller mutual fund companies are always looking for ways to differentiate themselves from the competition. The Permanent Portfolio Family of Funds, a fund group with $200 million in assets managed by Pacific...

A variable with variable annuities: Death benefit outside the contract; Critics say bundling makes cost too high.(News)
September 15, 2003... Byline: Rick Miller Critics of high-cost variable annuities say axing the death benefit is one way investors could cut their costs. A less expensive way to get the equivalent effect of a guaranteed minimum death benefit is to buy a...

Fast Track: Returning exec banks on total returns.(News)
September 22, 2003... Byline: David Hoffman Advantus Capital Management Inc. in St. Paul, Minn., is rebuilding its total-return investment team and has tapped Christopher R. Sebald to lead the effort. Advantus, a subsidiary of Securian Financial Group Inc.,...

If you think outside the (style) box, advertise; There's room for some opportunism, but for the most part, advisers want managers to be consistent.(Opinion)
September 22, 2003... Byline: Steve Hardy We have recently heard a number of active managers cry, "We would perform better if we weren't constrained to a style box.'' Is this just another excuse for bad performance, or is there some validity to the claim? Is...