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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.

Instilling Nerves of Steel

August 11, 2008 - If you can't say anything nice about someone, don't say anything at all. When it comes to mutual funds' communications with investors about today's economic realities, the industry puts a positive spin on the market.

Overlay Projects Proceed Amid Downturn

August 11, 2008 - Given the turbulence in financial markets, now may seem an inopportune time for financial advisers to make drastic changes to the way they interact with investors. But according to bank officials and technology providers, plenty of banks are moving ahead with their plans to implement new systems, including those that offer unified managed accounts and overlay software.

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.'

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.

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.

Impressive Strides by Funds Against Cancer

July 28, 2008 - PLYMOUTH, Mass. - The bewildered looks on the faces of young patients in the children's ward of the Dana-Farber Cancer Institute were wrenching enough. For Frank Strauss, who had himself become a parent in 1995 to his first child, Nicole, only three months before, the helplessness etched on their parents' faces was far worse. Having to walk through this scene every time he went to visit his mother, diagnosed with leukemia at the young age of 54, was devastating. Eventually, though, as Strauss' mother, Sandra, regained strength-she remains in remission today, as one in three adults who beats the disease-the ordeal became an inspiration.

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.

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.

Advisers Increase Clients' Cash Exposure

July 21, 2008 - Bad news for the mutual fund industry. The volatile market has stymied the 'long haul' game; an increasing number of financial advisers are moving larger portions of their clients' assets into cash positions. 'When you see the market dropping like a rock, does it make sense to tell most people that they should be O.K. with that?' said Tim Maurer, director of financial planning for The Financial Consulate. Many of his clients at his Hunt Valley, Md.-based practice have moved as much as 50% of their assets into cash over the last two quarters.

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.

Tax Warning to Hedge Funds Heading Overseas To Avoid Subprime Risks

July 14, 2008 - The ongoing credit crisis saga has taken a tremendous toll on hedge funds due to their exposure to structured mortgage-backed assets-and for those heading or parsing trades overseas to avoid U.S. taxes: Beware. The contracting demand for mortgage-backed securities-which had been dramatically overvalued by brokers who pushed more than 600 varieties of these assets to hedge fund managers through unregulated, highly leveraged repos-precipitated the tightening of unsecured term funding.

Money Market Funds Called Upon to Make Non-Public SEC Filings

July 14, 2008 - How serious are liquidity problems with money market mutual funds? Mercer Bullard, founder and president of Fund Democracy, believes they're serious enough to warrant an immediate rule requiring money market mutual funds to make non-public monthly electronic filings of their portfolios to the Securities and Exchange Commission. In fact, he's upset that so far, the only SEC reaction had been a secretary's acknowledgement of the receipt of his Jan. 16 rulemaking petition.

Equity Mutual Funds Slip 15 Basis Points in 2Q08

July 14, 2008 - Mutual fund investors held resilient in the second quarter of the year, 'shrugging off weakness in the labor and housing markets and even ignoring the rising cost of oil and gas,' announced Tom Roseen, senior research analyst for Lipper, during the firm's press conference last Tuesday on the quarter's results. 'We saw in the headlines that it was a very bad quarter, the worst quarter for the Dow since 1929, but I think you are going to see that that's not the case for mutual funds,' Roseen said. 'Certainly for a lot of the big, large-cap and value-oriented funds it was a real dour quarter and a horrible month in May, but if you take a grander look at things, the first two months of the quarter were really, really good.'

Sober Wake-Up Call At Morningstar Conference

July 7, 2008 - Morningstar's Investor Conference in Chicago may have echoed with many of the same old solutions of the past, but for those who listened carefully to Mohamed El-Erian's message, 'This time it's different.'