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November 30, 2009

Past Issues

Mutual Funds

Week In Review

DOL Drops Controversial Advice Rule Three days after saying it would delay the effective date to permit 401(k) plan administrators to offer investment advice, the Department of Labor decided to scrap the rule altogether. The third extension for the effective date would have been May 17, 2010.

Separately Managed Accounts

Wirehouse Advisors Reject Separate Accounts

Wirehouse advisors are increasingly shunning separate account programs in which securities are directly held in favor of other types of managed accounts that use mutual funds, exchange-traded funds, annuities or other professionally managed securities because they find the latter gives them more flexibility to control their clients' assets, according to a new report from Cerulli Associates. The consulting firm found that separate account programs have shrunk at an annualized rate of over 16% over the last 2-1/2 years. Nearly every other type of managed account program grew over the same period. The securities are traded by a professional money manager.

Alternative Investments

Commodity ETFs Surge in Popularity

NEW YORK - Investors and money managers looking to diversify their portfolios by getting into commodities and commodity exchange-traded funds should keep in mind the volatile nature of these products, as well as the wide range of possible risks, experts say. "The only way to make money on commodities is to buy and sell them," said Victor Sperandeo, president and CEO of Alpha Financial Technologies, at the Inside Commodities Conference held earlier this month at the New York Stock Exchange, hosted by IndexUniverse.

529s

College-Savings Firms Adopt Cash-Back Loyalty Programs

Two college-savings companies are borrowing a page from the consumer cash-back loyalty playbook, offering customers rebates on services including refinancing mortgages or opening online bank accounts. Futuretrust, a unit of Destination Maternity Corp., and Upromise Investments have partnered with a series of other financial services companies to offer rebates that can be swept into section 529 college-savings plans. Futuretrust has teamed up with Citigroup and Wells Fargo's Wachovia Bank to introduce a program where customers get 25 basis points of the amount that they refinance or originate in a mortgage deposited in a 529 plan, said Adam Bashe, a managing director at the company. It also has partnered with Waterfield Bank, an Irvine, Calif., online banking company, to deposit 1% annually of a customer's average daily balance in a 529 plan.

Governance

Firms Look For Compensation Alternatives

The financial services industry has been pulling in solid profits lately, but experts say firms should be mindful about how they dole out year-end bonuses and to keep the focus on rewarding long-term performance. Taxpayers were nearly ready to bring out "le guillotine" in March after the American International Group awarded the top executives in its financial products unit $165 million in bonuses just months after the firm received $173 billion in government bailouts.

Executive Moves

Executive Moves

Dumas, Leeson, Doucet Join Putnam DC Team Three veteran sales professionals, Alan Dumas, John Leeson and Chris Doucet, have joined the defined contribution team at Putnam Investments.