From the October 2006 issue of Investment Advisor • Subscribe!

News & Products

How sweet it is: KeyCorp is selling its McDonald Investments branch network to UBS, and the approximately 340 reps in those 51 branches are being given strong incentives by KeyCorp to make the move to UBS in the form of a "funded contribution to their UBS stock award plan," in addition to 10% to 70% bonuses from UBS on their past year's gross commissions, according to a Dow Jones Newswires story. UBS is expected to pay KeyCorp up to $280 million, and the deal is expected to close in the first quarter of 2007...

More than a slap: Prudential Securities, Inc. was ordered to pay $600 million to regulators, including the NASD, SEC, Department of Justice, and Massachusetts Securities Division, for "misconduct relating to improper market timing" according to the NASD. "The scale of the fraudulent market timing activity that was allowed to occur through this firm and that went unchecked by the firm's supervisory systems is unprecedented," said NASD Senior Executive VP Stephen Luparello...

American Funds Distributors, Inc. was fined $5 million by the NASD for directed brokerage violations, involving $98 million in commissions paid by the firm's parent, Capital Research and Management Company, from 2001 through 2003...

Follow the bouncing ball: MassMutual is dropping M&E and administrative charges on two of its annuities by 10 basis points: new and existing MassMutual Transitions Select fees drop to 1.15%; and on MassMutual Evolution flexible-premium deferred variable annuity contracts they will fall to 1.55%. The firm will raise fees by 10 basis points on new contracts for those two products that select the Guaranteed Minimum Accumulation Benefit feature. In addition, the firm is re-introducing its no contingent deferred sales charge annuity, Panorama Passage...

The SEC approved NASD Rule 2441 regarding Net Transactions with Customers, requiring disclosure and consent when trading with customers on a net basis, effective October 2...

Assets rose in 529 college savings plans, according to a Financial Research Corp. study released by the College Savings Foundation, to $77.3 billion at the end of the second quarter, with load portfolios responsible for 65.7% of net sales. For the past 12 months, assets in the commission channel have grown more than five times more rapidly than assets in no-load portfolios, with load portfolios growing at a rate of 27.4% versus just 5.2% for no-loads.

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