SHORT INTERESTS: TIPS, TRENDS, OBSERVATIONS

Advisers to the upperscale

Yes, the rich are different, but are their financial advisers?

Spectrem Group, a San Francisco consulting firm, is conducting a study of financial planners, stockbrokers and independent insurance agents who derive at least half their income from retail investors with $75,000-plus in their portfolios.

Spectrem is researching the “depth and character” of advisers’ relationships with vendors. It will look at advisers’ business and client service models and ask advisers what product opportunities they see in the marketplace, and ask them to name which companies they buy from are any good and which are not.

Spectrem plans to survey about 600 advisers, deliver results in the third quarter and charge a rich $27,500 for anyone who wants a peek, according to the 1999 Research Catalog.

Wed in June, split in May

June may be the month for brides, but May apparently is the month for financial advisers to prepare themselves to deal with clients’ divorces, at least in Connecticut’s Fairfield County (unofficial motto: Live rich or die).

The local chapter of the International Association for Financial Planning this Thursday will conduct a seminar at the Norwalk Inn on legal as well as financial aspects of divorce. It’ll be conducted by a lawyer and two financial planners, each a certified divorce planner.

A member of the American Society of Appraisers will round out the evening by leading a discussion on “The Importance of Recognizing and Appraising Fine and Decorative Art Found in the Home as Assets.” That’s just in case one party to the divorce wants to sneak off with the velvet painting of dogs playing poker without the other party’s getting something of equal value.

Where the money isn’t

It’s good to know that everybody inside Washington’s Beltway is exercised about repealing the Glass-Stegall Law barring bankers from putting a second hand in your pocket as an insurance company while grabbing your wallet with their teeth as a stockbroker.

How is it, then, that two of the strongest banks in the country flaunt their connection to the nation’s biggest broker? Both Merrill Lynch Bank and Trust Co. of Plainsboro Township, N.J., with a 1.37% return on its $1.765 billion in assets, and Merrill Lynch Bank USA of Salt Lake City, with a 1.32% return on its $989 million, make the Top 10, according to Weiss Ratings Inc. of Palm Beach Gardens, Fla.

The average bank last year had a 1.23% return on assets, the usual measure of a bank’s profitability. The average declined for the first time in nine years, from 1.31% in 1997.

Some of the biggest fared the worst: Profits at Citigroup’s Citibank fell $934 million to $1.7 billion (0.4% return on assets); at the old Bank of America unit of what is now Bank of America Corp., they South Poled $1.86 billion — yup, almost $2 billion — to $983 million (0.6% ROA); at the Morgan Guaranty Trust unit of J.P. Morgan & Co. Inc., profits slipped $616 million to $382 million (0.2%).

Martin Weiss, chairman of the eponymous rating service, foresees more bad news: “Last year’s decline could mark a significant turning point. We’re seeing an overall decline in corporate profits that is carrying over into the banking sector.”