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Separately Managed Accounts

Wirehouse Advisors Reject Separate Accounts

November 30, 2009 - 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.

Unified Accounts Offer Stock Trading Option

November 16, 2009 - The addition of non-managed assets to a unified managed account could be the next step in the product's evolution, but some industry providers are skeptical whether the interest in stock-picking right now is enough for this enhancement to take off. BMO Nesbitt Burns, a wealth management unit of Bank of Montreal, has expanded its partnership with unified managed account provider Placemark Investments to add a client-directed investment account to BMO Nesbitt's UMA, the BMO Nesbitt Burns Architect Account.

Managed Futures Becoming Tougher Sell

October 12, 2009 - In 2007, Philip Moses, a Raymond James adviser at First Federal Bank of Florida in Lake City, had a local physician as a client who wanted to diversify his $1.5 million portfolio. Moses, long an advocate of alternative investments, suggested a hefty 20% allocation to alternatives, including structured products, a multi-strategy hedge fund and a multi-advisor managed futures fund.

Non-Traditional ETFs Worry Regulators, Advisers

October 12, 2009 - As exchange-traded funds continue to grow in scope and popularity, investment experts warn that some products, such as leveraged and inverse ETFs, may be too dangerous for all but the most experienced hands. 'People get lazy and they think an ETF is an ETF,' said Paul Schatz, president and CEO of the Woodbridge, Conn.-based registered investment advisor Heritage Capital LLC. 'There are inherent problems with every product, and some products have way too much firepower for the average person to use.'

Politics Could Slow Risk Control Overhaul

October 5, 2009 - NEW YORK - Regulatory officials are pondering significant changes to the way the U.S. oversees financial markets in the wake of last year's credit crisis and the failure to prevent Bernard Madoff's massive Ponzi scheme, but lawmakers will have to make some hard choices before any real changes can happen. Financial industry experts blame these failures on the way regulatory agencies operate in silos and fail to share vital information.

SEC Seeks to Shore Up Advisor Custody Rule

September 7, 2009 - Regulators are looking for ways to increase accounting safeguards for investment advisors who have custody of client assets, but an investment advisor's group says some of the proposed changes are too broad and go too far. Proposed amendments to Rule 206(4)-2, requiring all investment advisors that control or have custody of client assets to hire an independent public accountant to conduct an annual 'surprise' examination of their books, would place an unnecessary burden on small advisory firms, according to the Washington-based Investment Adviser Association.

Target-Date Glidepaths Set Course for Start of Retirement or Beyond

September 7, 2009 - When like-named target-date funds experienced a wide range of investment returns in 2008, regulators at the Securities and Exchange Commission and the Department of Labor took notice. In addition to discovering a wide discrepancy in asset allocation techniques and performance, regulators discovered two fundamentally different glidepath strategies: one that gradually reduces an investor's equity exposure to a very conservative level by the time they reach the target date, and a strategy that maintains significant equity exposure well beyond the target date.

Finding the Opportunity of a Lifetime in the Financial Crisis

August 3, 2009 - Sometimes we seek out opportunities for change. Other times change is thrust upon us. Market conditions in the past 24 months have produced seismic shifts in the mutual fund industry, and several business drivers have emerged that will shape our industry's future. As asset managers, distributors, suppliers and others evaluate their next steps, these demands will drive strategies and shape new solutions. With change comes both risk and opportunity. For the nimble, thoughtful and resourceful, this set of challenging market conditions represents the opportunity of a lifetime.

Stable Value Stages a Comeback

August 3, 2009 - The recent drop in financial markets has rekindled the demand for safer, conservative financial products like stable-value funds. While stability often comes at a greater price-higher fees and historically lower returns than stocks and bonds-the peace of mind these products provide can be worth the cost to many investors.

Investors' Working Group Stresses Changes Needed

July 20, 2009 - NEW YORK - An investors' advocacy group is challenging the Obama Administration and Congress to do more for the needs of average investors. The Investors' Working Group, led by veteran regulators Arthur Levitt Jr. and William H. Donaldson, both former chairmen of the Securities and Exchange Commission, has published a long list of recommendations that closely resembles the administration's ideas and similar studies, but focuses primarily on the needs of investors.

Give Fund Managers Back The Power to Pick Stocks And Spot Macro Trends

June 8, 2009 - Finally, insiders launched candid criticism at the mutual fund industry last week, to help it respond sensibly to the economic meltdown and reposition itself to regain investor trust. Foremost among this advice is giving portfolio managers back the power to pick stocks and run with their investment ideas, instead of being so tightly tethered to an investment class and market capitalization. Further, fund managers should step away from their style boxes and take a look at bigger economic trends. The signs were all there, beginning with the 2007 demise of Bear Stearns' credit derivatives-laden hedge funds. Anyone could have foreseen the accelerating problems of the credit and capital markets, mutual fund managers among them. Had more of them moved into cash or safe investments, they would have avoided the across-the-board losses in 2008.

Beneficial Wealth Unit Sees Opportunity in Crisis

April 6, 2009 - The top wealth management executive at Beneficial Bank in Philadelphia said his unit aims to take advantage of its rivals' 'distractions.' 'We have fairly aggressive goals given the market,' said Robert Bush, the chairman and chief executive of Beneficial Advisors LLC and Beneficial Insurance Services LLC. 'But we feel we're in a better position to be more responsive than our competitors'-in particular larger companies wrestling with the financial crisis.

Atlantic Trust's New CEO Sees a Chance to Grow

March 16, 2009 - Invesco's Atlantic Trust Private Wealth Management plans to take advantage of the 'chaos' in the financial services industry to add assets and customers, according to its new chief executive officer. Jeffrey S. Thomas, promoted to CEO earlier this month, said in an interview that the unit has increased its referrals from clients and intermediaries, including accountants and lawyers, in the past six months.

Silvercrest Manager Sees Silver Lining in Financial Market Mess

February 2, 2009 - Here's a word to the wise for any executives of publicly traded companies who may be about to be visited by Portfolio Manager Roger Vogel: Don't roll out the red carpet and offer him a slick, well-rehearsed tour of a spotless and smoothly humming facility. 'One thing we worry about are managers who are very promotional,' Vogel said. 'We can understand it if a manager is a poor presenter. It doesn't mean they are bad managers. But we do get concerned when people get flamboyant or aggressive in their presentation.'

Volatile Times Offer Great Client Servicing Opportunities

February 2, 2009 - NEW YORK - Despite the terrible news about most stocks and mutual funds, investors should heed Sophocles' warning and 'don't kill the messenger.' Many investors are so frustrated by recent losses, they are seriously considering firing the crew that was on duty when their losses happened and switching to another investment firm, but with nearly every asset class down 30% to 40% in 2008, they're not so sure a different team will perform better.