Money Management Executive Latest News

Fidelity Investments announced Friday that it has promoted Rob Strickland, executive vice president of adviser and alliance distribution in Canada for the past two years, to become president of Fidelity Investments Canada. He succeeds David Denison, who left Fidelity last month to become president and CEO of the Canada Pension Plan Investment Board.

Led by favorable stock market activity and a reputation still unmarked by the scandal, Fidelity Investments witnessed a 23% surge in net income in 2004.

Janus Capital Group on Friday launched two new diversified equity mutual funds in an effort to leverage the firm's research depth, a reputation that was sullied when the market tanked in the aftermath of the dot-com bubble.

MIAMI - Having put the pain of a pervasive trading scandal behind it, Alliance Capital Management and its mutual fund subsidiary Alliance Bernstein are focused on carving out market share and winning new clients by retooling their distribution strategy.

The common practice of revenue sharing, where mutual fund companies pay brokers to tout their funds to clients, eventually hurts investors, according to Morningstar columnist Eric Jacobson writes. Even though revenue-sharing payments to brokers are made from mutual funds' own coffers and not from the funds' assets, investors are shortchanged because brokers are more likely to promote funds that pay them to do so rather than funds which offer the best deal to investors.

Challenges abound for the successor to Paul Roye, the Securities and Exchange Commission's outgoing director of the investment management division, MarketWatch reports. The division, which oversees the mutual fund industry, has been in the spotlight for some time now, owing to the wave of scandals that have hit the fund industry.

A new survey conducted by the Investment Company Institute, the mutual fund industry's main trade group, shows that 12b-1 fees have grown significantly since 1980, when the Securities and Exchange Commission instituted them. The fees, which funds charge investors to compensate financial advisers who provide investors with financial advice, have overtaken front-end sales loads.

Next week, the Securities and Exchange Commission will vote on a revised rule that allows mutual funds to impose a 2% redemption fee on mutual fund shares that are traded in within five days of purchase, Dow Jones reports. Originally, the SEC sought to impose a mandatory fee, eventually changing its proposal to a voluntary rule.

Even though directed brokerage has now been banned and revenue-sharing agreements are under close regulatory scrutiny, financial advisers will play an increasingly significant role in mutual funds sales in the coming years, according to a report from Financial Research Corp. The company predicts that direct sales to investors will drop from 15% in 2004 to 10% in 2009, while adviser-assisted sales will rise from 57% to 61% during the same period, The Wall Street Journal reports.

Many workers are not using their 401(k) plans to realize their full retirement savings potential, according to a study conducted by consulting firm Hewitt Associates and researchers from Harvard University and the University of Pennsylvania's Wharton School, Dow Jones reports.