Schwab Fined $1 Million for Lax Oversight of Non-Employee RIAsNov 15, 2005,By Kevin Burke Charles Schwab’s brokerage unit has been slapped with a $1 million fine for failing to protect customer assets from a check-kiting scam engineered by its affiliated—but independent—registered investment advisors.... For Advest Reps, Clock Is TickingNov 14, 2005,By John Churchill With only two weeks left before Merrill Lynch closes its deal to buy Advest Group—the deal is scheduled to close on Dec. 1—top reps at the Hartford, Conn.-based firm continue to run for the exits. This past weekend another $8 million in production decamped for other firms.... Cox to SIA: No Regulatory RollbackNov 11, 2005,By David A. Geracioti When William Donaldson stepped down as SEC chairman, the perception was that the reform movement had also left the building. The White House replaced him with California Congressman Christopher Cox, known for his anti-regulatory rhetoric. But in his first speech to the Securities Industry Association today, Cox delivered a strong message: “The guns of the SEC are not about to go silent.” Cox said pirates may no longer sail the waters off Boca Raton, Fla.—where the SIA annual meeting is being held—but “today’s pirates sail the seas of high finance.”... News From the SIA MeetingNov 10, 2005,By David A. Geracioti The top executives of the nation’s biggest securities firms have gathered once again at their annual meeting, and declared that 2005 will go down as one of the industry’s best years ever. Profits of the 600 Securities Industry Association member firms are expected to jump by more than 14 percent, to $23.7 billion this year, on a revenue increase of 32 percent (to an estimated $314 billion). And employment at financial services firms jumped by 14.9 percent in the past year, the Bureau of Labor Statistics reported. (But advisors take note: Retail jobs declined by 1.3 percent.)... Morgan Stanley Waves Baby Carrot at Sales AssistantsNov 10, 2005,By Kristen French As Wall Street traders and investment bankers lick their chops at the prospect of six- and seven-figure bonuses next month, Morgan Stanley has decided that sales assistants should get a taste of corporate largess. It won’t put anybody behind the wheel of a “Beemer,” but the brokerage announced plans to bump up the 2006 raise pool to 3.5 percent from 3 percent, and will offer an additional 5 percent to some underpaid SAs, starting in December.... One Weird Termination Case: “Decorated” Pru Broker Wins Wrongful Termination SuitOct 31, 2005,By Kristen French The day he was fired from then-Prudential Securities—July 25, 2001—is a day Bob Ostrowski says he will never forget. But he says he's ready to start trying: Ostrowski was awarded $2 million from Prudential for wrongful termination in a New York Stock Exchange arbitration proceeding Wednesday. ... Regulators Hit Ameriprise for $1.25 Million Over 529 SalesOct 26, 2005,By Kevin Burke Regulators fired their first shot in what figures to be a round of enforcement actions against brokerages for abusive sales practices related to 529 college savings plans.... Bernanke Nomination Applauded by Brokerage IndustryOct 24, 2005,By Halah Touryalai With the nomination of Ben Bernanke to chairman of the Federal Reserve Board—likely the most powerful banking job in the world—President Bush hit the nail on the head, say brokerage industry officials, as well as brokers. His long tenure at the Federal Reserve makes him well prepared for the role, and he will not likely mark a significant departure from Chairman Alan Greenspan’s 18 1/2 year reign over the institution, they say.... UMAs: The Next Big ThingOct 24, 2005,By Halah Touryalai The unified managed account (UMA), the latest permutation of a separately managed account (SMA), is being billed as the “next big thing” for financial advisors. Such billing is cause enough for skepticism, but the UMA does appear to have all the ingredients needed for delivering a fully diversified, customized portfolio for the tax-sensitive retail investor—albeit at a princely price to the client.... Merrill Call Center Under MicroscopeOct 20, 2005,By John Churchill Merrill Lynch’s brokerage call centers, its service centers for less complicated and less profitable accounts, are under investigation by the NASD for past improprieties.... Market-Timer Banned and FinedOct 13, 2005,By John Churchill Theodore Sihpol III, the former broker at Banc of America Securities (BAS) and poster boy for the market-timing scandals, agreed to pay a $200,000 fine and to accept a five-year ban from the securities industry. New York Attorney General Eliot Spitzer dropped criminal charges against Sihpol, a notable event since Sihpol was the first target of Spitzer’s probes to have rejected a plea offer.... Are You Charging Enough?Sep 29, 2005,By John Churchill How much do you charge your clients? What is the right price to put on your services? With competition fierce—and clients more informed than ever—it’s important to make sure that you are not selling yourself short. In fact, you may not be charging enough for your services.... Morgan Stanley’s Retail Unit Posts Mixed Third QuarterSep 22, 2005,By John Churchill Morgan Stanley’s retail brokerage recorded pretax tax profits of $30 million for the third quarter, a healthy 36 percent gain over last year, despite a continued exodus of advisors and large legal and regulatory costs. But client assets fell versus the prior quarter, an ominous sign.... Rogue Broker's Management CulpableSep 21, 2005,By Susan Konig Raymond James Financial Services (RJFS) was ordered to pay a $6.9 million fine to the SEC for failing to supervise Dennis Herula, a former broker who is currently in prison after pleading guilty to federal charges of fraud.... Merrill Cutting Top BrassSep 20, 2005,By John Churchill Merrill Lynch, famous for its seemingly continual reorganizations, is at it again. ... Charles Schwab Drops Service, Order FeesSep 16, 2005,By John Kador In a nod to the smaller investors who gave the firm its early success, Charles Schwab Corp. has eliminated its remaining account service fees and its $3-per-order handling charge on equity trades.... Merrill Gets Advest CheapSep 15, 2005,By John Churchill Merrill Lynch reportedly paid $400 million for the purchase of the Advest Group from AXA. The purchase includes the private client retail division, an asset management arm and a capital markets group. According to analysts, Merrill got the firm cheap.... H&R Block On a Recruiting SpreeSep 14, 2005,By John Churchill The firm known primarily for its tax preparation services is ramping up its financial advisory force. H&R Block Financial Advisors had a record recruiting month in August, bringing aboard 48 financial advisors with a combined $1 billion in assets under management, according to a release.... Overtime Pay, Chargebacks Under Fire; Morgan Stanley Latest Firm in Lawyers’ SightsSep 14, 2005,By Kristen French A $450 million class-action lawsuit filed in New York against Morgan Stanley on Friday could have major implications for brokerages’ pay practices in the state. Filed by a former Morgan Stanley broker, the lawsuit claims the firm failed to pay its brokers for overtime, and improperly deducted certain business expenses from their earnings. A Morgan Stanley spokeswoman declined to comment on the case.... Mother Merrill Adopts Advest From AXASep 14, 2005,By John Churchill Merrill Lynch and AXA Financial, part of French insurance giant AXA, announced today that Merrill would buy The Advest Group, AXA’s full-service retail brokerage arm.... More Adieus From Morgan Stanley DirectorsSep 12, 2005,By Kristen French As expected, Morgan Stanley board members from the Philip Purcell era continue to decamp, with two more directors out. Charles Knight and John Jacob, both of whom were on the board’s compensation committee, resigned Friday. Knight was chairman of the compensation committee.... Imagine 50 Eliot SpitzersSep 9, 2005,By Stan Luxenberg When are mutual fund companies charging too much in advisory fees? What constitutes proper disclosure of, say, revenue sharing? And which governmental authority has jurisdiction over these issues?... Post-Purcell Shuffle Claims Miles, More Morgan Directors to Follow?Sep 7, 2005,By Kristen French The changing of the guard at Morgan Stanley continues as leadership loyal to departed CEO Philip Purcell heads for the exits. The company announced Tuesday that director Michael Miles had resigned his post, and analysts say more directors are likely to do the same in coming months to avoid a big proxy battle.... Retaining Those Pesky EmailsAug 30, 2005,By John Churchill Morgan Stanley is in for what could be a $10 million fine from the SEC for failing to retain emails, according to a report by the Wall Street Journal Online.... Proprietary Matters for AEFA and UBSAug 23, 2005,By John Churchill Selling proprietary product via a firm’s own sales force was once considered a great strategy for maximizing revenue. In another sign that that strategy is dead (as if you needed one): UBS and Ameriprise are now embroiled in separate class-actions suits.... |
Current Issue Asset-Gathering MachinesBY HALAH TOURYALAI In the first half of 2008, Camden Capital Management, a fee-only RIA in El Segundo, Calif., added $100 million to its growing pot of client assets... advertisement
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