Short Interests: Schwab trying to bond with advisers

Charles Schwab Corp. isn’t just getting mad at Advent Software Inc.; it’s bringing its back-office software onto a more even footing with its San Francisco rival.

Performance Technologies Inc., Schwab’s Raleigh, N.C.-based subsidiary, last week released Centerpiece 5.5, which includes long-awaited features for fixed-income reporting and analytics.

Advent’s Axys software has long been the hands-down winner of larger, more fixed-income-oriented accounts because of its advantage in that area.

Schwab and Advent are still in a legal tussle over what technology will be used to provide daily information downloads to Schwab advisers using Axys.

Maryland veto right for Price

So much for competition.

Thanks to lobbying by T. Rowe Price Associates Inc. in Baltimore, Maryland’s governor has vetoed a bill to allow a state tax deduction for residents who invest in other states’ college savings plans.

T. Rowe, which manages Maryland’s 529 plan, asked the governor to reject the bill that would have allowed the deduction.

It also would have closed a loophole that lets residents deduct up to $25,000 for investing in Maryland’s 529 plan.

Gov. Parris Glendening says he can fix that problem without legislation, and will cut the deduction to $2,500 per account holder.

The veto irritates the bill’s proponents, which include the state’s legislative leaders.

They say residents shouldn’t be penalized for finding a better 529 option out of state.

Untangling sector maze

Morningstar, which brought you star ratings and style boxes, has plans for a new visual tool – sector webs.

“We want to cash in on this `Spider-Man’ thing going on,” quips Don Phillips, the Chicago fund tracker’s managing director.

By mapping sectors on a spider web design, Morningstar hopes to better illustrate how a mutual fund or an investor’s entire portfolio may skew to one sector of the market or another. The web divides the economy into 12 sectors: consumer goods, industrial materials, energy, utilities, software, hardware, media, telecommunications, health care, and financial, business and consumer services.

“So much of what financial planners are trying to do is communicate financial concepts to people who are not financially literate,” says Mr. Phillips. “If you throw a table of numbers at them, it doesn’t influence behavior. If you can put it into a picture, it can really make a difference.”

Sector webs will be clinging to a Morningstar product near you starting in the third quarter, says Mr. Phillips.