At the Bell

Schwab executing its job-cut plan

Following up on what it promised in an early-August 10-Q Securities and Exchange Commission filing (InvestmentNews, Aug. 13), Charles Schwab Corp. is going to cut 2,400 employees, or 11% of it work force, by the end of October. Between 1,600 and 1,900 will be cut from the company’s full-time ranks.

Another 200 pink slips will go to subcontractors, and an estimated 200 or 300 will be culled by attrition, a spokesman added.

The resulting quarterly pretax savings of $65 million will drive earnings per share to 55 cents, from 48 cents, according to Mark L. Constant, a Lehman Brothers Holdings Inc. analyst. But he is not convinced that 7 cents will buoy Schwab’s share price. “We continue to believe the fair value for the stock to be closer to $7-$8 per share.” Schwab’s shares currently are trading near $12.

Wells acquiring a fund adviser

Wells Fargo & Co. is acquiring the adviser to the $789 million SIFE Trust fund, which invests in financial services companies. Wells will add the SIFE fund to its lineup. The company said the fund’s portfolio manager, Michael Stead, would be kept on staff, along with a research team. But it said the fate of the rest of the staff of about 25 had not been decided.

Terms were not disclosed. The deal is expected to close early next year.

Active management foray for E*Trade

Signaling a significant shift in strategy, E*Trade Group Inc. will launch its first actively managed mutual fund. The Menlo Park, Calif., online broker is asking shareholders to approve plans to convert its Bond Index Fund into an actively managed fund by the end of the year, according to a filing last week with the Securities and Exchange Commission.

If the change is approved at a Nov. 2 meeting of shareholders, the fund would be managed by E*Trade Asset Management Inc.

The group’s Extended Market Index Fund and its Global Titans Index Fund were slated to be liquidated Friday, cutting the company’s lineup to eight index funds.

Big Board fines Raymond James

The New York Stock Exchange censured Raymond James & Associates last week and fined the St. Petersburg firm $250,000 for violating exchange rules in the way it set up and ran its offices in Europe.

Raymond James had neither registered the offices with the exchange nor had qualified, registered people in charge, according to the exchange.

The 12 offices were spread throughout England, France, Germany, Belgium and Switzerland.

The company said that the alleged rule violations were technical and that the Big Board had not claimed that customers had suffered losses.

Enterprise adds a pair of funds

The Enterprise Group of Funds in Atlanta is offering two new funds, the Enterprise Strategic Allocation Fund and the Enterprise Total Return Fund.

The allocation fund will be subadvised by Brinson Associates of New York and the return fund by Pimco of Newport Beach, Calif.

The announcement said the allocation fund would reevaluate its portfolio every month, taking the pressure off investors who may wonder whether they are in the market at the right time.

Rowe Price to offer Morningstar tools

T. Rowe Price Group Inc. of Baltimore is teaming up with Morningstar Associates LLC to offer investors free online financial planning services and investment guidance.

The services, announced last week, will be available to both individual investors and participants in T. Rowe 401(k) plans.

The alliance marks the first collaboration of its kind between Chicago’s Morningstar and a major financial services company.

The companies hope to start rolling out the services by yearend.