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Market volatility and an uneven path for the economic recovery are set to continue for years, according to Towers Watson. What’s more, all asset classes will face higher-than-average volatility, Towers Watson said.

Rather than offer the complete lineup of a target-date series in their 401(k) plan, sponsors are selecting only those funds that fit the age and demographics of their employees. This could result in under-funded target-date funds that could put the entire lineup in jeopardy, according to a new report, “Trends in Date-Date Portfolios on Recordkeeper Platforms,” from Financial Research Corp.

The August reading of the Consumer Reports Index fell to 43.3, its lowest level since December 2009. Falling 5.1 points from 48.5 in July, the index registered its sharpest drop in two years.

Maribeth Kuzmeski, president of Red Zone Marketing, suggests financial advisors should embrace social media to promote themselves and find creative, meaningful ways to differentiate yourself from competitors.

As the financial markets hit investors with gale-force market dips, most advisors are telling their clients to drop anchor. And, at least in the short term, most investors heeded that advice as the Dow Jones Industrial average closed up more than 400 points Tuesday, just one day after losing more than 600 points, the sixth-largest, single-day decline in history.

The Financial Industry Regulatory Authority fined a securities brokerage arm of Citigroup $500,000 for failing to supervise a former employee who misappropriated most of a million dollars from clients, including her own father.

SEC Slaps Mutual Fund Trader for Accepting Gifts From BrokersPrinter Friendly Email Reprints Reader Comments Share | August 9, 2011Chris KentourisThe Securities and Exchange Commission has upheld an administrative judge’s ruling that a mutual fund trader must pay more than $200,000 in penalties for accepting gifts from broker-dealers to steer trades their way.Like what you see? Click here to sign up for Securities Technology Monitor's weekly newsletter to get the latest news and analysis that matters to the effective operation of capital markets.The regulator didn’t buy the trader’s excuse that the mutual funds weren’t harmed.The SEC said that Robert Burns, a former equity trader at FMR Co., violated the Investment Company Act of 1940 by accepting the compensation from brokerage firms. Burns had to disgorge about $141,000 and interest of $67,205. He must also pay a civil penalty of $40,000. FMR is a subsidiary of Fidelity Management and Research Company that manages the Fidelity Investments group of mutual funds.Burns, who was dismissed by FMR in December 2004, sent orders to more than fifty brokerage firms. Of those fifty about ten gave him thirty nine gifts such as wine, travel and tickets to concerts, sporting events and theater productions. The gifts, according to the SEC included tickets to the Wimbledon tennis finals in 2002, 2003 and 2004; a case of 1993 Château Pétrus Pomerol wine in December 2003; tickets to see Prince, the Rolling Stones, Bruce Springsteen, Madonna, and several other performers in concert; tickets to games involving the Boston Celtics, Boston Red Sox and New England Patriots and tickets to theater events including "The Lion King," "The Producers," "Avenue Q," and "Hairspray."Burns did not dispute that he received the gifts but insisted that they did not influence his decisions. He argued that the SEC failed to prove that any fund was harmed by paying a higher commission rate than otherwise available so he did not violate the Investment Company Act.However, the SEC countered that Burns had to prove that he did not violate his fiduciary duty. And even if he could do so, he would have to prove the gifts were unrelated to his role as an equity trader.“The record shows and Burns does not contest, that he accepted numerous gifts from multiple brokers to whom he directed and continued to direct securities transactions on behalf of mutual funds to which he, affiliated with the funds’ adviser, owed a fiduciary duty,” wrote the SEC in its ruling on August 5. “We therefore conclude that the division has made a prima facie showing that, in accepting these gifts, Burns’ interest conflicted with that of the investment companies he was advising.”The case involving Burns is the tip of the iceberg in charges filed by the SEC against Fidelity and several of its senior-ranking traders, over the alleged acceptance of bribes in exchange for steering business to select brokerages.Vincent Loporchio, a spokesman for Fidelity in Boston, said that his firm has taken steps to enhance its policies and procedures concerning conflicts of interest."We adopted additional written standards of conduct related to business entertainment and acceptance of gifts; expanded the role of our ethics office responsible for regulatory compliance and established a new level of management oversight for our trading department," he said.

How do you talk to your clients about the debt ceiling and budget battles when so many people are strongly -- perhaps not always rationally -- on one side or the other of the political divide? Suddenly, loss of confidence in our country's legislative and executive leadership is driving loss of confidence in the markets and it seems the two are now linked in ways that we may never have seen before.

Bowing to concerns about the costs of compliance, the Securities and Exchange Commission is trying to figure out just how much broker-dealers, transfer agents and banks must spend to track down owners of unclaimed securities accounts before it issues a new rule.

Uncertainty and fear are driving affluent investors into cash at record levels, according to the MFS Investing Sentiment Survey. While investors of all ages are moving into cash, they are being led by Generation Y.

As the stock prices of the big banks cratered on Monday, particularly for Bank of America Corp., pundits and industry observers began worrying that a second financial crisis was in the offing, including the possibility of the failure of a large financial institution.

Everyone knew it wasn't going to be pretty. But Monday's sell-off of U.S. equities in the first trading day since credit rating agency Standard and Poor's cut the U.S. government's sovereign debt rating from AAA to AA+ on Friday sent stocks into a free fall and has investors and their financial advisors wondering what -- if anything -- they should do now.

One of the challenges that we have as professionals is motivating our clients to do their estate planning. Our new television special titled "Trial & Heirs: Protect Your Family Fortune!" debuts tonight and we think it will help motivate your clients to take the necessary estate planning steps that many have put off for far too long.

The opening morning of focus11, LPL Financial's national conference, got off to a rocky start Monday as the market took an immediate downturn with news of the Standard and Poor’s downgrade. LPL’s regular research morning call was scheduled onsite, which was perfect, as the advisors got to hear firsthand what LPL’s take was.

Mortgage woes have been the overriding concern of investors in the country's largest banks in recent months. Not any more. In the wake of Standard & Poor's downgrade of U.S. government debt on Friday, fears about capital markets exposure are now taking precedence over mortgages and cancelling out the perceived safety that investors normally ascribe to the largest banks.

With its eye on the small and midsized defined contribution markets, BlackRock, Inc., has broadened its lineup of index mutual funds for defined contribution plans.

BlackRock has added 10 index funds to its retirement platform, nine of them the target-date BlackRock LifePath Index Portfolios and the 10ths the All Country World Index ex-U.S. Fund. The new LifePath Index Portfolios extend the investment horizon out by 44 years, with the funds having target dates of 2020, 2025, 2030, 2035, 2040, 2045, 2050 and 2055.

The Conference Board Employment Trends Index declined slightly in July to 100.6, down 0.3 percentage points from June’s 100.9. However, from a year ago, the July index is up 4%.

Even before the events surrounding the U.S. debt ceiling deal and downgrade, affluent investors’ concerns about how long their retirement assets will last was rising, according to a new Bank of America Merrill Lynch survey conducted in June.

S&P Downgrades DTCC SubsidiariesPrinter Friendly Email Reprints Reader Comments Share | August 8, 2011Chris Kentouris Just hours after it said that Standard & Poor's downgrade on the triple A rating of U.S. government debt would not impact its valuations on collateral, Depository Trust & Clearing Corp was hit with its own downgrade.Like what you see? Click here to sign up for Securities Technology Monitor's weekly newsletter to get the latest news and analysis that matters to the effective operation of capital markets.S&P downgraded its triple-A rating on DTCC's subsidiaries Depository Trust Company, Fixed Income Clearing Corp and National Securities Clearing Corp to double A+, the same as U.S. government debt.The three organizations are critical to the U.S. financial market: DTC is the U.S. central depository system which settles U.S. equity and fixed income transactions while FICC and NSCC clear those transactions. In 2010 alone, DTC settled nearly $1.66 quadrillion worth of trades.S&P's decision to downgrade DTCC and its subsidiaries was pretty much expected based on the rating agency's announcement on Friday evening. S&P made it clear that its move to downgrade U.S. government debt could affect insurers, mortgage agencies and securities clearinghouses. At the time S&P characterized the target organizations as "entities with direct links to, or reliance on, the federal government."In a statement issued on Monday morning DTCC downplayed the impact of S&P's downgrade. "We do not anticipate any changes in our operations as a result of this revision of our credit rating," said DTCC. The market-owned utility also cited comments made by S&P that the ratings downgrade of its depository and clearinghouses did not reflect a change in S&P's view of the "fundamental soundness" of DTC or the clearinghouses but incorporate "potential incremental shifts in the macroeconomic and long term stability of the U.S. capital markets as a consequence of the decline in the creditworthiness of the federal government."Prior to the downgrade today, DTC and NSCC had received S&P's Triple A rating for nine consecutive years and FICC for siJust hours after it said that Standard & Poor's downgrade on the triple A rating of U.S. government debt would not impact its valuations on collateral, Depository Trust & Clearing Corp. was hit with its own downgrade.S&P downgraded its triple-A rating on DTCC's subsidiaries Depository Trust Company, Fixed Income Clearing Corp. and National Securities Clearing Corp. to double A+, the same as U.S. government debt.