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February 15, 2010

 Past Issues

Mutual Funds

Week In Review

SEC to Propose New Target-Date Fund Rule, 80% of Companies Plan To Reinstate 401(k) Match, 50% of Advisers Turn To Tactical Management, and the Employment Trends Index Continues to Improve.

Retirement

Kalamarides Seeks Risk Disclosure for Target-Date Funds

Fund managers should consider improving target-date fund disclosure to better align these products with the individual risk tolerance of investors, particularly in light of increased regulatory scrutiny over the performance of these funds in 2008, a retirement income expert says.

Jamie Kalamarides, senior vice president of retirement solutions at Prudential Retirement, recently spoke with Money Management Executive about improvements to the retirement income product lineup, annuity wrappers for 401(k) plans and multi-employer savings plans for small businesses.

Ops & Tech

New Money Fund Rules Could Create Headaches For Transfer Agents

The Securities and Exchange Commission's new rules to improve liquidity and disclosure for money market funds spared the $3.2 trillion industry from the cumbersome operational task of marking value of shares to market every day.

The bad news is the burden is now on the back office. Money market funds must adapt their customer service procedures and information systems to more frequently disclose their "shadow net asset values" and modify their transfer agent systems to be able to process orders and redemptions at a price other than $1 a share.

A New Look at Outsourcing: A Key Strategy for Recovery

The ability to adapt to changing market conditions has always been a critical element for success in the financial services arena. But in today's market, asset managers will have to go beyond adaptation and in many respects reinvent themselves in order to ride out a perfect storm of industry pressures.

Recovery from the recession of 2008-2009 promises to be slow. Net revenues remain threatened as investors continue to gravitate toward lower-margin and "safer" products. And consolidation among distributors exerts pressure on institutional pricing and revenue sharing. Surviving in a risk-sensitive, capital-intensive environment will require asset management companies to restructure operating models as they seek to increase revenues and transform costs, while responding to changing investor needs.

Governance

Companies Brace for Active Proxy Season

This year's proxy season could be very turbulent for corporate boards of directors, thanks to increased shareholder activism and new rules that increase proxy disclosure.

"Companies need to reach out and have good relations with their shareholders," said Amy Goodman, a partner and co-head of the securities regulation and corporate governance practice at Gibson, Dunn & Crutcher. "This is going to be a very difficult proxy season. Boards should be attuned to where potential problems may be."

Performance

New 6% Savings Rate To Funnel $800 Billion to Investments Annually

The financial crisis has made a permanent impression on American consumers, who are likely to save 6% or more of their income over the next decade, translating to as much as $800 billion stashed away each year, according to a new study by Allianz Group. Along with this mentality, investors will be looking for guaranteed and safe savings solutions.

Executive Moves

Executive Moves

OppenheimerFunds Chair Murphy Joins Korn/Ferry, Baron Appoints Feldman Head of Intermediary Sales and a Non-Profit Specialist Joins MassMutual Retirement.