For One Group Funds’ shareholders, the wait is over. Today, the SEC said that roughly $55.6 million in so-called “fair funds” have been distributed to more than 200,000 investors who were bilked by fraudulent market timing activity in certain Banc One mutual funds—the One Group Funds. (If you’re scoring at home, that’s about $278 per shareholder; the amount received was based on the amount invested.)
Sweeping federal reforms on 403(b) plans should mean more demand for services from financial advisors, as plan sponsors (primarily K-12 public school districts and small not-for-profit organizations) try to manage the new requirements.
So you thought the market timing scandal was over. Think again. While nearly all the mutual fund shops nabbed in the Eliot Spitzer-led trading investigation have settled with regulators, brokerage firms are still being put through the wringer for their involvement in illicit trading activity. Individual brokers who were involved in abusive trading may also be punished.
An NASD arbitration panel awarded a former Merrill Lynch broker $1.6 million for wrongful termination and defamation, claims he had filed against his former employer. The award included compensatory damages of $400,000 plus interest and punitive damages of $1.2 million. Awards of that size are a rarity in arbitration cases brought by employees against brokerage firms.
Merrill Lynch’s retail brokerage arm turned in another strong quarter, as fee-based revenue continued to climb to record levels. Merrill Lynch Global Private Client saw its revenues increase by 13 percent to $3.3 billion from $2.9 billion in the year-ago quarter. The pretax profit margin for the entire Global Wealth Management division was 27.9 percent, up from 23.7 percent in the prior-year period, driven by the impact of the investment in BlackRock and prudent expense controls.
First it was the firms, now it’s the brokers. The carnage from the mutual fund scandal continues as regulators have moved over from settlements with fund companies and brokerage houses for alleged trading and sales abuses and are now aiming their quiver at individual registered reps.
Individual investors are paying less to own mutual fund shares, as fees and expenses have hit their lowest level in more than 25 years, according to research published Tuesday by the Investment Company Institute. In 2006, fund shareholders, on average, paid 107 basis points or 1.07 percent of assets in fees and expenses, including loads, which is four basis points lower than in 2005. Expense ratios on equity funds declined a combined 7 basis points during 2005 and 2006, the ICI says. If that rate of decline were to be sustained, stock fund investors would save roughly $4.6 billion a year.
In this 3rd and final session of our Social Security webinar series, we will cover the under-served markets for divorced and survivor benefits, where there are special benefits that so many people miss out on....More
Rising Federal tax bills are prompting many Florida investors to take a new look at adding tax-free income from municipal bonds to their portfolios–but low interest rates and headlines about credit risks from issuers like Detroit and Puerto Rico mean advisors need to be more careful about their recommendations in this once-sleep market....More
These articles from the Investments & Wealth Monitor focus on what’s ahead for the new normal, investment management in the new normal, and a forward-looking approach to international equity risk allocation....More
How the U.S. Federal Reserve manages its exit from emergency liquidity programs will have important implications for all asset markets and could increase volatility. Meanwhile, monetary policies are also becoming less synchronized globally....More