Mad rush for the door seen as unlikely

Perhaps brokers and branch managers at wirehouse offices should have taken a good look around the office last Friday before leaving for the Labor Day weekend. Such long weekends traditionally give brokers a precious extra day to prepare to move and contact clients if the broker decides to bolt to another firm.

Perhaps brokers and branch managers at wirehouse offices should have taken a good look around the office last Friday before leaving for the Labor Day weekend.
Such long weekends traditionally give brokers a precious extra day to prepare to move and contact clients if the broker decides to bolt to another firm.
But while some brokers will move over the long weekend, it probably won’t resemble a mad dash for the door, said one industry recruiter.
“It’s still big, but it’s not as important as it used to be,” said Danny Sarch, a principal with Leitner Sarch Consultants Ltd., a recruiting firm based in White Plains, N.Y.
He cited two reasons: the broker protocol for recruiting that the wirehouses signed a few years ago and the fact that many clients are simply on vacation and out of reach. The broker protocol allows representatives to take a limited amount of client information when they leave, and it also stipulates that firms won’t slap reps with temporary restraining orders when they move to a rival.
“Managers are sweating this weekend. The reps still have the advantage over the long weekend because other reps can’t steal your clients,” said Mr. Sarch.

Shiny apple
The summer’s remarkable market volatility apparently is not based only on fears of changes in interest rates and a painful surge in home loan foreclosures.
Last Wednesday and Thursday, the price of shares of Apple Inc. took off because of rumors that the Cupertino, Calif.-based technology firm would launch a new version of its popular iPods this week. The new version would be timed to arrive at stores just in time for kids to show off the gear when they returned to school.
Not surprisingly, Wall Street cooed and gurgled over the potential news.
“Coming at least a week ahead of our expectations, the almost certain launch of a new family of iPods next Wednesday, Sept. 5, creates another opportunity for upside in the back half of the year and provides another reason to own Apple shares,” David Bailey, an analyst with The Goldman Sachs Group Inc. of New York, wrote in a note to clients.
And how did shares of Apple stock respond to the buzz? On Wednesday morning, the stock opened at $129.88 a share, and on Thursday, the stock reached a high of $138.25.

De-backdating debacle?
While the Securities and Exchange Commission continues to investigate some 130 companies for the backdating of employee stock options, the Financial Industry Regulatory Authority has sued one independent-contractor broker-dealer, in part because of the “de-backdating” of certain variable annuity transactions.
Mutual Service Corp. of West Palm Beach, Fla., and five of its principals are the subject of the complaint by FINRA, which is based in Washington and New York. The complaint targets MSC for allegedly shoddy and inaccurate books and records related to the sale of variable annuities, including tax-free exchanges known as 1035 exchanges.
It was issued in July but was first reported on investmentnews.com last week.

A few bucks to burn
The lucky ones — or those with a little extra cash to burn — managed to get out of town for the long weekend.
Americans were expected to travel about the same amount over Labor Day weekend as they did last year, according to a survey released last Wednesday by AAA of St. Louis.
One reason that the number did not increase was a heightened concern about affordability.
“Many Americans are facing household budget constraints this summer, which may be affecting holiday travel,” Robert Darbelnet, president of AAA, said in a press release.
Still, millions of people were on the road for the final fling of summer.
Some 34.6 million Americans were expected to travel 50 miles or more from home during the three-day holiday weekend, up just 0.2% from last year’s prediction, according to the survey.