SNOW SAYS ADMINISTRATION WILL WORK TO REFORM FUND INDUSTRY: Treasury Secretary John Snow told a financial lobbying group that the Bush administration supports an overhaul of the $7.5 trillion mutual fund industry, and would work with fund companies on possible reform strategies.

Speaking recently to the Financial Services Roundtable in Scottsdale, Ariz., Snow said that the Bush administration “supports taking strong action when harm is done to investors, but believes that care must be taken to preserve the valuable benefits and flexibility that mutual funds provide.”

The secretary’s reference was to the action of some lawmakers who have requested that the Securities and Exchange Commission retreat from its previous proposal of a “hard 4 p.m. close,” which proponents of the measure maintain would end the practice of illegal late trading.

Last week, Reps. Michael Oxley, R-Ohio, and Richard Baker, R-La., urged SEC Chairman William Donaldson “to consider the unintended consequences that the hard 4:00 close rule will have on mutual fund consumers.”


NEW CHARTERED ADVISOR DESIGNATION LAUNCHED: The American College has created a new designation for financial advisors serving retired clients and clients planning for retirement.

In order to earn the Chartered Advisor for Senior Living designation, advisors must pass five college-level courses and meet certain experience, ethical and continuing education requirements. The five courses cover investments, the fundamentals of estate planning, understanding the older client, health and long-term care financing, and financial decisions for retirement. In addition, graduates will learn best practices and proven strategies to assist seniors with key lifestyle issues, including work and retirement, family relationships, psychological perspectives on aging, and health care issues.

The curriculum was developed by the college with an advisory committee of industry professionals from New York Life, GE Financial Assurance, State Farm, MetLife, Northwestern Mutual, Bankers Life and Casualty, Physician’s Mutual, Mutual of Omaha, John Hancock, Prudential Financial and MassMutual.

Each course in the curriculum costs $425, which includes all printed study materials, audiocassette reviews, videotapes and access to online courses, where available. New students pay a one-time $70 nonrefundable matriculation fee. More information is available at www.amercoll.edu.


EXPERTS SAY RETIREMENT PLANS ARE FAILING: Some 50 percent of retirement plans fail because the real rate of return is not considered, according to Matt Sharpe, senior vice president of retirement income marketing at GE Financial.

“A few years ago, the real rate of return on equities was 10 percent,” Sharpe said. “This is now down to 7 percent, and if you weigh in inflation of 3 percent, you are really talking about 4 percent.”

Sharpe was part of a roundtable discussion that looked at the challenges facing American pre-retirees and retirees, which he claimed are unlike anything seen by prior generations. “And, Americans do not appear to be seeking the right help.”

Pamela Schutz, vice president of GE, and president and chief executive of GE’s Life and Annuity Assurance Co., pointed out that Americans have “unrealistic expectations.” She said that less than one in four Americans today between the ages of 40 and 59 had saved at least $100,000 toward retirement. Frank Gencarelli, executive vice president of the retirement service group, added that 47 percent of workers and 40 percent of retirees have saved less than $50,000, “and the government is not going to fill in the gaps.”

The answer to the predicament, stressed Norm Mindel, a certified financial planner and executive vice president of GE Financial Independent Accountants Network, is that people have to refocus their direction and beliefs. “Americans do more accumulating of money than anybody else in the world, but we do not put enough of what is accumulated in the right vehicles.” In that respect, Mindel raised the matter of annuities, citing a recent survey that showed that only 3 percent of respondents used annuities in the context of retirement income planning.

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