MORNINGSTAR TO PURCHASE IBBOTSON: High-profile investment research and products provider Morningstar will buy privately held Ibbotson Associates - an asset allocation service concern - for $83 million. The deal is expected to close in the first quarter of 2006. Morningstar said that it would retain the Ibbotson brand and is currently in the process of assembling a transition team."Ibbotson's expertise in asset allocation and Morningstar's expertise in security selection and investment research is a powerful combination," said Joe Mansueto, chairman and chief executive officer of Morningstar, in a statement. "Our companies share many similarities, and we have a firm commitment to helping investors reach their financial goals."
Ibbotson generated roughly $37 million in revenue for its last fiscal year, and has some $3.5 billion in assets under management in 401(k) and other defined-contribution plans.
Both Roger Ibbotson, the founder of Ibbotson Associates, and Mike Henkel, the firm's president, plan to stay with the company following the close of the transaction.
PAYCHEX LAUNCHES HSA OFFERING: Rochester, N.Y-based payroll and benefits outsourcing provider Paychex Inc. has partnered with Mellon Financial and Affiliated Computer Services to offer the Paychex Health Savings Account.
The HSA is available to Paychex's small business payroll clients, as well as clients of Paychex Premier Human Resources and Paychex Business Solutions - the company's professional employer organization.
Under the terms of the partnership, Paychex collects and remits HSA funds to Mellon Trust of New England, the account custodian. Meanwhile, ACS provides account administration and customer service for employers and accountholders.
HSA accounts allow individuals to save money tax-free to pay for qualified medical expenses both now and for the future. Individuals covered by a qualified high-deductible health plan are eligible to enroll in an HSA.
An HSA is owned by the individual, not the employer; therefore, if the owner incurs a change in status, including job, medical coverage or marital status, the HSA account remains with that individual.
U.S. INVESTORS LACKING 'SURVIVOR' SKILLS: The vast majority of American investors do not possess important "investor survival skills" needed to build their savings into a retirement nest egg, according to a Securities Investor Protection Corp./Investor Protection Trust survey conducted by Opinion Research Corp.
The poll gauged the knowledge and behavior of investors who either manage their own accounts or work directly with financial professionals.
More than four out of five investors (83 percent) failed the SIPC/IPT test of key knowledge and behavior. Only 17 percent of respondents correctly answered a sufficient number of questions on knowledge (six out of eight questions) and behavior (three out of four questions). Women were more likely than men to fail the test by a margin of 91 percent to 77 percent.
Just one in five investors or 21 percent said that they practice all four of the desirable behavioral traits focused on in the SIPC/IPT survey: reading prospectuses, regularly reviewing account statements, checking out the disciplinary backgrounds of brokers/financial planners, and having a financial plan in place.
Two of the encouraging findings in the survey findings centered on account statements and diversification. Nine in 10 investors said that they regularly review their brokerage account or mutual fund statements, while nearly three out of four investors showed that they understand the concept of diversification.
The SIPC/IPT survey polled a sample of 2,063 adults comprising 1,036 men and 1,027 women 18 years of age and older, living in private households in the continental United States.
For the full survey findings, go to www.sipc.org/survivalquiz on the Web. The online, self-scoring version of the SIPC/IPT survey is also available online at www.sipc.org/survivalquiz.
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