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Red Carpet Service For the Worried

August 11, 2008 - With consumers nervous about their financial health, banks such as Wells Fargo and Citizens Bank see this need as an opportunity. Wells Fargo is making licensed brokers available to customers to discuss risk, assets and investment strategies. The bank's goal is to reach customers who aren't high-net-worth, but still have a mix of products across a number of institutions: deposits, loans, retirement plans, mutual funds and education financing.

Wealthy Investors Grow Pessimistic

August 11, 2008 - As the stock market continues to stumble along, high-net-worth investors are becoming increasingly pessimistic about the economy and dissatisfied with the performance of their financial services providers. 'When times are going well, people don't complain about fees, they complain about softer stuff, like how they don't think their adviser is attentive enough,' said Walt Zultowski, senior vice president of research and concept development for The Phoenix Companies and author of the '2008 Phoenix Wealth Survey.'

Companies Gear Up For XBRL Reporting

August 11, 2008 - The Securities and Exchange Commission could mandate the use of eXtensible Business Reporting Language (XBRL) in mutual fund risk return summaries by as early as the first quarter of next year, according to industry experts, putting many fund companies on the data-tagging fast track. XBRL US, the U.S. version of the international consortium, has joined forces with Andover, Mass.-based mutual fund data provider NewRiver to make sure public companies, mutual funds and credit rating agencies are ready in time.

SEC Helps Boards Get Over The Enigma of Trades

August 4, 2008 - The Securities and Exchange Commission issued guidance last week for fund boards of directors in assessing their firm’s soft-dollar practices. The SEC said it was issuing the guidance a full two years after the limitations it put on soft dollars in 2006, restricting it only to research, due to rapidly evolving market and trading practices. True enough, there are wide discrepancies among brokerages today, due to rapidly evolving markets, trading practices and electronic crossing networks. Fund companies have until Oct. 1 to comment on the SEC’s guidance. The Commission outlines numerous considerations for boards, which must rely on reports from top management, auditors, counsel and chief compliance officers in assessing day-to-day trading systems.

ICI Asks SEC to Expand Credit Rating Rules

August 4, 2008 - WASHINGTON — The Investment Company Institute last Monday urged the Securities and Exchange Commission to expand its proposed credit rating agency rules on structured products to include municipal securities, and to increase the secondary market disclosure requirements for the municipal market. The ICI said that the SEC’s proposed rules that would require credit rating agencies to disclose conflicts of interest highlight similar disclosure issues in the municipal market. In addition, the ICI said, the Commission’s proposal to take references to certain ratings out of its rules will put the onus of credit analysis more squarely on fund companies and other investors that will, in turn, need more up-to-date disclosures from municipal issuers.

The Dichotomies of the 22 Million Mass Affluent

August 4, 2008 - America's new mass affluent blend so effortlessly into society that it's often impossible to tell them apart from a traditional middle class family one day, or from an upper class family the next. Depending on which day you encounter a typical new mass affluent family, a mother could be found cutting out coupons and buying bulk at Sam's Club, or she and her husband could be playing golf at their country club.

401(k) Plans Move to Collective Trusts

July 28, 2008 - BOSTON - Workers love pension plans, but providing 20 to 30 years of benefits to a huge retired workforce can cripple most companies' profits. As more firms drop their defined benefit pension plans in favor of defined contribution 401(k)s, institutions are looking for qualified default investment alternatives to mutual funds, such as collective investment trusts (CITs) and separately managed accounts (SMAs), to provide employees with pension-like features.

Fund Execs Defend 401(k) Fees

July 28, 2008 - BOSTON - Excessive fees in some 401(k) plans are hurting the reputation of all 401(k) plans and shaking investor confidence in what most financial experts agree is a great way for the majority of Americans to save for retirement. 'There is a notion in the press that 401(k) investors are being hosed. This is not the case,' said Michael Hadley, the Investment Company Institute's associate counsel for pension regulation, at the 'Defined Contribution Investment Only Forum,' held last Monday and Tuesday at the Harvard Club, and hosted by Financial Research Associates. '401(k) investors are getting an incredible deal.'

Europe to Make UCITS Yet More Efficient

July 21, 2008 - The European Union proposed a new set of rules Thursday to make Undertakings for Collective Investment in Transferable Securities (UCITS) even more efficient by eliminating additional regulatory hurdles. Most notably, the rules- which will replace 10 directives with just one and go into effect in 2011-will allow cross-border mergers of funds, making Europe's mutual fund industry more efficient. They will also permit master-feeder structures and eliminate much of the administrative paperwork currently required to market funds to other markets in the European Union of 27 member states. The revised regulations will also call for a two-page, plain English summary as opposed to the average 60-page prospectus.

DTCC, Swift Partner on Alternative Messaging

July 21, 2008 - The Depository Trust & Clearing Corp. (DTCC) and the Society for Worldwide Interbank Financial Telecommunication (Swift) are working together to introduce 12 interoperable XML-based message formats to the alternative investment community. The initiative is designed to allow market participants to connect to DTCC's Alternative Investment Products (AIP) platform, slated to begin testing in the third quarter, via the Swift network using International Organization for Standardization (ISO) 20022-compliant XML messages. Firms will also be able to use proprietary formats through DTCC's Smart network.

Hey, Boomers, Surf's Up!

July 21, 2008 - Don't just retire. 'Reengage, reinvigorate, redefine, rejuvenate.' That's the inspirational message at MyRetirementShop.com, a new, all-in-one website for the 'at retirement' generation that AXA Equitable Life Insurance launched last Wednesday, after two years of research and numerous focus groups. Many independent sites already exist, but have had limited success attempting to cater to this crowd. AXA's website is notable not just for its comprehensiveness-from a concierge who can schedule a golf tee time, to learning about working while collecting Social Security benefits, to obtaining a doctor's second opinion-but also because it is the first of its kind for a financial services firm. It provides information pertaining to virtually any lifestyle interest or question that a retiree or pre-retiree might have, not just their finances.

Regulators Aim to Stop Spread of Rumors

July 21, 2008 - Federal regulators are cracking down on the potential spread of false and misleading rumors that could potentially affect market conditions. While rumor mongering is not a widespread problem in the financial industry, a few high-profile cases-the SEC investigating 50 hedge funds last week for potentially spreading rumors on the fall of Bear Stearns and Lehman, and halting shorting Freddie Mac and Fannie Mae-have forced regulators to take a strong public stance against such actions. Then there were the arrests last month of former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin for securities fraud and the April settlement of securities fraud and market manipulation charges by Paul Berliner, a former trader with the Schottenfeld Group.

Talent Grabs Keep Flaring Despite High Cost

July 7, 2008 - Mutual fund companies and other financial services firms continue to battle one another for wealth management talent even though companies are forced to pay hefty salaries that crimp profits.

Hedge Funds Fear New SEC Regulations

June 30, 2008 - NEW YORK - The freewheeling days for hedge funds may be numbered. Depending on who gets elected to the White House in November, the next Securities and Exchange Commission may push to impose additional regulations on hedge funds that, many critics say, could strangle managers' ability to generate exceptional returns. Ironically, hedge fund experts say the best way for the industry to prepare for the new regulations may also be the best way to prevent the new regulations from happening.

Distribution Road Hits Superhighway

June 30, 2008 - WELLESLEY, Mass. - Gone are the supposed days when wholesalers stood around conference booths all day, cavalierly handing out golf balls, or taking brokers out for cigars and whiskey. To get through the new 'Fund Selection Unit' gatekeepers at brokerage firms, today's wholesalers need not just have excellent people skills and be nimble, but be highly knowledgeable about the mutual funds they are selling, retirement planning issues and the economy, as well as be technologically savvy. 'Wholesalers act as the quarterback in the field,' said Matthew Witkos, president of Eaton Vance Distributors, at the National Investment Company Service Association's General Membership Meeting here, held last Monday at the Wellesley Country Club. 'They have such a huge responsibility. Imagine trying to remember what product you have on what platforms at what time.'