Money Management Executive Latest News

It's no secret that mutual fund companies have done a deplorable job of researching the behavior of their consumers. Industry executives point out that for years the likes of Procter and Gamble have been examining consumers' attitudes toward laundry detergent while consumers' feelings about investment products have been largely ignored.

This year's Morningstar conference began with the issuance of a challenge to the fund industry by Morningstar managing director Don Phillips to improve investors' experience with mutual funds.

Mutual fund companies repeatedly commit cardinal sins when it comes to marketing their products, says a mutual fund industry marketing consultant. And it doesn't look like that will change anytime soon.

The mutual fund industry has historically showed its resilience to competitive products and predictions of its demise have always proven false. So it is not likely that several products that have gained recent attention from investors and the financial media will spell the end of the fund industry, said industry executives speaking at the Morningstar Investment Conference last week.

Fund groups, anxious to lure bulky retirement assets including IRA rollovers into their funds, are creating or altering special no-load share classes for just that purpose.

In the burgeoning business of socially responsible investing, companies sometimes employ the help of a board of advisors in choosing stocks. The boards are often made up of experts with commanding resumes. They include professors, politicians and philanthropists.

Publisher SRI World plans to launch a Web new site in August that will help institutional investors research socially acceptable places to put their money.

Despite the increasing popularity of exchange-traded funds and wrap accounts, mutual fund supermarkets are poised to thrive through at least the next two decades, an industry consultant said.

Hearings are expected to commence soon on a new bill that would allow retirement plan providers to offer advisory services to plan participants, something that is largely prohibited now. Representative John Boehner (R-Ohio), chairman of the House Committee on Education and the Workforce introduced the bill, called the Retirement Security Advice Act, last month.

The U.S. is not alone in revamping its pension plan rules. Last month, legislation was passed in Japan that opens the door for retirement and financial companies to enter that market, according to Larry Zimpleman, senior vp of the Principal Financial Group in Des Moines. As it stands now, only more traditional pension plans can be offered in Japan, where the benefit an individual receives is a function of his salary and how long he worked at his company, and the employer takes on the responsibility of the funding.