AT THE BELL

Annuity marketing markup

In an unusual move for a variable-annuity provider, Waddell & Reed Financial Inc. is asking contract holders to approve a new 25-basis-point marketing fee on top of existing fees, according to a proxy statement filed last week with the Securities and Exchange Commission. These 12(b)1 fees are common in mutual funds, but not in the variable-annuity industry, which has been hit with general criticism about high fees. The Overland Park, Kan., company said in the statement that the charges would help cover increased costs of servicing clients and retaining personnel. The TMK/United annuity, which is being renamed Target/United, is sold exclusively through Waddell & Reed’s 2,200 financial planners. Waddell & Reed, which manages more than $23 billion in its mutual funds and variable annuities, runs 11 portfolios for the annuity. The company was spun off by Birmingham, Ala., insurer Torchmark Corp. earlier this year in an initial public offering.

Net exchange pitted vs. pits

An upstart Internet-based electronic exchange is expected to challenge pit-traded option contracts tied to technology stock indexes traded at San Francisco’s Pacific Exchange, New York’s American Stock Exchange and the Philadelphia Stock Exchange. Futurecom of Amarillo, Tex., filed an application with the Commodity Futures Trading Commission late last week to trade futures and options on its new FutureTech Stock Index, which comprises stocks traded on the New York Stock Exchange and Nasdaq. The exchange — which expects to win federal regulatory approval to operate later this year — will charge transaction fees that are less than half of those charged for pit-traded futures and options contracts, according to managing partner William O’Brien.

Funds shrug off GM strike

The strike at General Motors Corp. has had a nominal effect on mutual fund performance so far, managers say. But Neil J. Hennessy, who presides over the Hennessy Balanced Fund in Novato, Calif., believes the strike “has a larger ripple effect throughout the economy.” Maybe so. The Dow Jones Industrial Average closed Friday at 8712.87, down 100.14 on the day and 122.07, or 1.38%, for the week.

Mr. Hennessy’s problem: He couldn’t dump GM (which has dropped 3% since the strike began) even if he wanted. His no-load fund invests half its $24 million in assets in Treasury bills and the other half evenly spread over the Dogs of the Dow. GM makes up 4.6% of its portfolio. His fear is employees at other companies will strike to pressure management to share in the profits.

According to Morningstar Inc., the funds with the largest weightings in GM are Morgan Stanley Institutional Aggressive Equity, 12.18%; Morgan Stanley Aggressive Equity, 11.54%; DFA U.S. Large Cap Value, 6.98%; Robertson Stephens Global Value, 7.97%, and Morgan Stanley Institutional Equity, 6.55%. Mr. Hennessy’s fund ranks eighth.

Shorter prospectus in prospect

The variable annuity industry hopes to send the Securities and Exchange Commission a proposal late this fall calling for prospectuses to be trimmed by more than half. Judith Hasenauer, a lawyer with Blazzard Grodd & Hasenauer of Lauderdale-by-the-Sea, Fla., told the National Association for Variable Annuities’ regulatory affairs conference in Washington last week that a first draft is complete — 10 pages instead of 25 — and survey results have been favorable.

Nvest adds target-finder

Nvest Cos., the Boston money-management holding company with 15 affiliates and $135 billion under management, has added muscle to its acquisition arm. The firm, which is widely believed to be talking about a takeover with New York mutual-fund company Zweig/Glaser Advisors, just hired merger-and-acquisition specialist W. Christopher Cowperthwaite for its corporate development group. Mr. Cowperthwaite had worked in the acquisition department of a U.S. subsidiary of the Long-Term Credit Bank of Japan.

Four more planning programs

In a sign of growing competition among schools eager to train financial planners, the Certified Financial Planner Board of Examiners registered four new programs in May, the Denver-based, non-profit professional group reports. That brings to 105 the number of registered programs, up from one when the board was founded in 1985. The new programs are offered by Edinboro (Pa.) University, the University of Akron in Ohio, Mankato (Minn.) State University and Western Carolina University in Cullowhee, N.C.