Special Program Root Tag

Research firm Morningstar has filed an initial public offering statement with the Securities and Exchange Commission to sell shares of common stock in the company.

The NASD recently announced a $10 million project to be run by its not-for-profit Investor Education Foundation to better educate investors on financial markets. The foundation will work with other not-for-profit groups and researchers to conduct educational projects.

Janus Discussing Brokers

Sen. Peter Fitzgerald has two wishes this year.

Few people in the mutual fund industry, outside of those who have been charged in the scandal, have been under as incredible pressure or faced as tough questions in the past few months as Paul Roye, the nation's top cop for the mutual fund industry.

With longstanding mutual fund practices such as directed brokerage and revenue sharing likely headed for the junk pile, the heated debate over the merits of soft-dollar research commissions has intensified.

Most financial advisers share their clients' level of concern about the mutual fund scandal, according to a survey of 124 financial advisers conducted by Select Sector SPDRs, for which State Street Global Advisors serves as investment advisor. A quarter of advisers expressed little concern about the scandal, mostly because they feel the problems are limited to only a few certain companies.

The director of research at Morningstar has advised investors to sell four mutual funds in a recent "Fund Spy" column.

Phoenix Capital Resources Names Poeta Director, SVP

William Galvin makes no apologies for his outspoken nature or his insistence on twisting the arm of Putnam Investments until the firm cried "uncle."

In the wake of the mutual fund scandal, exchange traded funds (ETFs), small niche managers and fund groups not implicated in the scandal have been raking in assets and pumping up their relative market share of the industry's $5 trillion in non-money market assets.

Mutual fund industry critics need not look far to find the root cause for the industry's scandals. The problem lies in the industry's predominant governance structure. Aside from the Vanguard Group, external management is the order of the day, meaning that conflicts of interest over fund expenditures aren't just common, they are inherent. Equally inherent is the risk that the external manager will allow practices that serve its interests, to the detriment of fund shareholders.

Despite the acknowledged importance of retirement savings, the cost of offering a defined contribution plan keeps many small business owners from offering them.

Regulators are searching for a rescue plan for the fund industry scandals, but the effort is doomed if the rulemakers continue in-the-box thinking, said David Silver, former president of the Investment Company Institute.

Most in the mutual fund industry will remember 2003 as the year of the scandal.

Whether separately managed accounts are ultimately a product or a process, they ultimately require convincing the client to sign on the dotted line. In fact, SMA clients have to sign on many dotted lines. And as with any sales process, financial advisers find a variety of ways to persuade their clients to pick up that pen.

ORLANDO -- Worried that equity index annuities (EIAs) are too complicated for the average insurance agent? Apparently, you're not alone in those fears, as education remains a high priority for marketers of EIAs, especially following last fall's approval of a model regulation on annuity sales to seniors from the National Association of Insurance Commissioners in Kansas City, Mo (see Annuity Market News, October 2003) and interest from other regulators.

Back-office technology is now emerging as having played a role in the fund scandal, requiring fund companies to take a fresh look at their clearing systems.

Hit last October with charges of fraud in the mutual fund investigations, Putnam Investments has been losing close to $3 billion in assets a month as investors cut and run. In an effort to shore up its reputation, the Boston mutual-fund giant has already cut fees on many of its mutual funds. But with regulators taking a closer look at 529 plans, Putnam Investments has now decided to voluntarily cut fees and broaden disclosure on its 529 plan.

Mutual fund marketers have maintained for decades that sales is a game of building trust through face-to-face meetings with clients. Put specialized wholesalers in front of different types of financial advisers, and sales are bound to rise. Divisions of labor within mutual fund marketing departments traditionally amounted to a game of divide and conquer in which some groups of wholesalers targeted wirehouse brokerage firms, while others tackled regional brokers, advisers domiciled at banks or insurance companies, independent advisers or accountants.