Practice

The average account balance for active 401(k) participants grew by 26 percent from 1996 to 1998, largely due to the continuing bull market in equities, according to a recent study by the Employee Benefit Research Institute and the Investment Company Institute, both of Washington, D.C.

Mutual fund investors are better served by following a "buy and hold" investment strategy rather than moving in and out of top performing funds, according to the SEC.

Intuit of Mountain View, Calif. and TeamVest of Charlotte, N.C. have joined together to offer free online investment advice for 401(k) plan participants.

After a string of successes in the courtroom through most of last year, the mutual fund industry suffered a setback recently in a federal class action lawsuit which contends that directors lost their independence by earning high pay for serving on multiple mutual fund boards.

Despite heightened awareness within the fund industry and increased scrutiny by the SEC of fund trustee independence, three newly-registered funds have, in recent months, placed individuals whose independence might be questioned, on their boards.

The Investment Company Institute has recommended the SEC tweak proposed rules which would enable fund companies to send only one copy of a proxy statement to a household whose members own the same fund in more than one account.

A class action suit against Dreyfus Corporation of New York will go forward in U.S. District Court in New York. The court dismissed five of eight claims against Dreyfus on Jan. 5. But, the judge allowed three claims to go forward. The remaining claims allege portfolio manager misconduct.

SEC Chairman Arthur Levitt is scheduled to give the keynote address next month at a special conference for independent mutual fund directors in Washington, D.C.

There is a new headache and expense coming for mutual fund companies this year - privacy compliance.

In light of the Securities and Exchange Commission's report that auditors at PricewaterhouseCoopers of New York compromised their independence with their mutual fund and other securities holdings, the SEC might cite other accounting firms for putting their independence in question, said accounting industry lawyers and executives.