State Street to Sell Private Asset Management Biz to Schwab: U.S. Trust Corp., a subsidiary of Charles Schwab, signed an agreement to acquire the private asset management business of State Street Corp. for about $365 million in cash.
The deal, which is expected to close in the fourth quarter, represents U.S. Trust’s largest acquisition to date. The Boston-based asset management group, which had $11.5 billion in assets under management at the end of March, contributed roughly $80 million to State Street’s revenue in 2002.
The business will adopt the U.S. Trust name but will retain its current management. Eric Hayes, division head and senior principal for State Street’s private asset management business, will be named regional chief executive officer and will head U.S. Trust’s New England business.
As of March 31, New York-based U.S. Trust had assets under management of $80 billion.
Financial Profiles Purchases StatiaFX: Allmerica Financial Corp. subsidiary Financial Profiles Inc. has purchased StatiaFX Inc., a Portland, Ore.-based provider of data acquisition, consolidation and wealth-management technology solutions.
According to the company, the move accelerates its strategy to incorporate data acquisition and consolidation technology into an integrated product line of wealth management, financial planning and portfolio analysis solutions. Financial Profiles will release its fully integrated product line in Fall 2003 to support Profiles + applications, Advent/TechFi and other clearinghouse interfaces. The Web-based platform will leverage XML technology.
Fidelity Eliminates Sales Load on Five Funds: To attract investors, Fidelity has eliminated the 3 percent front-end sales charge on five of its funds. The change affects Fidelity’s Contrafund, Contrafund II, Low-Priced Stock Fund, Magellan Fund and New Millennium Fund.
Earlier this year, Fidelity waived the sales load on its Contrafund through the end of June, but decided not to reinstate it. The company said that it has no current plans to re-open the New Millennium Fund and the Magellan Fund, which have been closed to new investors since 1996 and 1997, respectively. Fidelity’s 41 sector and industry funds will continue to carry a 3 percent sales charge.
Survey says Men Outnumber Women in Use of Self-Directed Brokerage Accounts: Men using self-directed brokerage accounts outnumber women by nearly three to one, and have much higher average account balances than women Ñ $104,000 versus $48,000, according to a survey by Charles Schwab Corporate Services.
While SDBA users tend to invest conservatively regardless of their gender, women generally behave more conservatively than men, Schwab said. On average, women held about 1.5 positions fewer than men (5.4 versus 6.9) and made fewer trades (1.4 versus 2.1).
First quarter net flows into cash and equivalents were 29 percent for women, compared to a net outflow of 6 percent for men. First quarter net flows into mutual funds and equities for men were 61 percent and 26 percent respectively, compared to 39 percent and 14 percent respectively for women.
Cash and equivalents holdings represent nearly 40 percent of account assets for women, compared to 26 percent for men. Overall, men have more account assets in individual equities (22 percent versus 17 percent) and mutual funds (44 percent versus 38 percent), Schwab reported.
Elsea Resigns from FPA: Director of education Bud Elsea has resigned from the Financial Planning Association after 11 years to pursue opportunities within the corporate sector, the organization announced.
While at the FPA and one of its predecessor organizations, the International Association for Financial Planning, Elsea was responsible for the development of educational content and the program administration process for over 100 conferences. He was also instrumental in the creation of the FPA’s Virtual Success Forum, which led to the creation of its Virtual Learning Center. The group said that it is actively seeking to fill the position.
