AT THE BELL

Stage set for mega-group

The two largest financial planning associations have taken a rocket-powered leap toward merger. Their leaders announced at a San Diego conference last week that the boards of the Institute of Certified Financial Planners and International Association for Financial Planning had backed plans for a new organization with elements of both, dedicated to promoting financial planning and the CFP designation.

The IAFP’s recognition last fall of the CFP as the preeminent financial planning designation paved the way for the current talks. Leaders of the groups say they have to iron out details, including the new organization’s name, headquarters and leadership. They hope by yearend to present a proposal to their members, who would have to vote to approve a merger.

“I think the members deserve one organization that can speak for them,” says Richard Rojeck, president of the Atlanta-based IAFP.

While promotion of the CFP designation would be a key principle, attainment of the mark would not be a prerequisite for membership. The association’s members include stockbrokers, bankers, insurance agents and others who aren’t CFPs while members of the Denver-based institute must hold the designation.

Acknowledging the challenge of selling his membership on a potential agreement, ICFP President Robert Klosterman says “One of the core values of the institute has always been promotion of the mark. We will be getting feedback from members, and I’m sure we’ll hear a lot from them about that.”

Indeed, leaders of some of the group’s largest regional chapters already have voiced objections out of concern over cultural differences.

Several planners at the institute’s San Diego confab expressed doubt that an agreement would be reached soon. Not only does the leadership of a combined association need to be set at the national level, but at the regional society level as well, they said. In addition, corporate sponsors are represented on the IAFP’s board, but not on the ICFP’s.

But there are certain advantages. Curt Weil, a Palo Alto, Calif. planner, alludes to one of them: “I’m tired of writing two checks every year.”

IAFP’s membership grew 7% last year to 17,000, 13,000 of whom are CFPs. The ICFP grew by 10% to nearly 13,000.

Regulatory relief from SEC

Investment advisers that do business in 30 or more states but do not have at least $25 million under management may register with the Securities and Exchange Commission as a result of a rule issued last week. Formerly, these firms were regulated by individual states. A separate rule change permits reps from SEC-registered investment adviser firms to have up to five individual clients without being subject to state qualification requirements.

Fund trackers on faster track

Fund trackers are rushing to upgrade their offerings as competition heats up. On Friday, CDA/Wiesenberger Inc. of Rockville, Md., told InvestmentNews about a joint venture that will allow it to update its HySales fund-tracking software for brokers electronically through an Internet-based network run by Moneystar of Austin, Tex. The software, used by 150,000 brokers, previously could be updated only via CD-ROM.

The move came a day after Lipper Analytical Services Inc. said it was being bought by Reuters Group PLC, a move expected to keep Chicago’s Morningstar Inc. on its toes. Founder A. Michael Lipper said the New York company will continue to market to investment companies and media outlets, rather than individuals. It also will go after online brokerages, now that it has access to the global reach and resources of London-based Reuters.

Feeling demutual in Mass.

The Massachusetts Senate last week gave final passage to a bill that allows mutual insurance companies to sell stock through special holding companies. The measure, which acting Governor Paul Cellucci has said he will sign, lets insurers raise capital by issuing stock but does not require them to share accumulated profits with policyholders, who nominally own mutual insurers. Two dozen states have similar laws.

Futures panel holds off

Brooksley Born, chairman of the Commodity Futures Trading Commission, wrote to the House Agriculture Committee on Friday saying the agency would make no attempt to regulate over-the-counter derivatives before Congress reconvenes in 1999, “except as necessary in an emergency.” (See related story, Page 18.)

Roller-coaster’s 400-point drop

Hammered by weak profit growth and little chance of a rate cut, the Dow Jones Industrial Average closed at 8937.36 Friday, after falling some 400 points from the previous Friday’s record of 9337.97. The Standard & Poor’s 500 stock index closed at 1140.80, down from 1185.75 a week earlier.

“I think we are seeing a market correction,” says Beth Cotner, manager of Putnam Investments’ Investors Fund, with $4.5 billion in assets. “There are some obvious signs that the economy is slowing down, and probably more so than people expected.” A number of companies announced lower than expected earnings last week including Gateway Inc., the No. 2 direct seller of personal computers, Hewlett-Packard Co. and Walt Disney Co.