Products June 19, 2007

Bear Stearns Broadens Mutual Fund Platform

Bear Stearns Broker-Dealer&Investment Advisor Services (BDIAS) on Tuesday announced it is significantly broadening its mutual fund platform by expanding the list of available funds and adding to its set of mutual fund research tools.

Reported by

Rebecca Moore

According to the announcement, over 10,000 funds spanning more than 300 fund families are now available through the Bear Stearns mutual fund platform, including approximately 5,600 no load and load-waived funds. Over 3,400 funds will be available through FundCIRCUIT, the Bear Stearns No Transaction Fee (NTF) Platform, more than doubling the current roster of funds, the announcement said.

To help clients analyze and compare different funds, BDIAS has added NewRiver’s FundPOINT Desktop to its suite of products which includes FundTOOLS, a set of research tools powered by Morningstar. Both mutual fund research engines are available through the BDIAS Web portal.

FundPOINT Desktop provides access to mutual fund prospectus information, and includes features such as a share class analysis tool, information related to breakpoints, rights of accumulation, and letters of intent.

FundTOOLS includes three research functions from Morningstar:

Fund Compare offers clients the ability to compare performance, yield, ratios and other characteristics for multiple mutual funds.
Fund Screener allows clients to set specific criteria, such as cost, return, and ratings and then screens funds available through Bear Stearns for a match.
Investment Profiles provides clients with access to in-depth information on mutual funds, such as the Morningstar Rating, Morningstar Style Box, performance and portfolio sector breakdowns.

More information can be found at www.bearstearns.com.

IMHO June 17, 2007

IMHO: Caveat Emptor

A couple of weeks ago, my better half told me that she thought it was time that we traded in two of our aging vehicles – one a car that is too small for our family, the other a van that now seems too big for all but cross-country trips – for something in the middle.

Reported by

Nevin E. Adams

I was amenable to the idea – until she mentioned that she didn’t think we needed to buy a new vehicle as a replacement.

If you have ever in your life purchased a “pre-owned’ anything, you’ll appreciate the dangers inherent in the principle of caveat emptor: literally, “let the buyer beware.’ That’s why, to this day, the notion of purchasing a used car practically causes me to break out in cold sweats. Not that lemons don’t roll off the new car lots every day – but there, at least, it seems that your odds are better, if not in terms of product, at least of obtaining satisfaction if something doesn’t work out.

Buying a used car is, of course, as much art as science – particularly if you aren’t mechanically inclined. That’s why it has become fairly common to enlist the support of a trusted mechanic to assess the reliability of a potential vehicle purchase. Of course, that works only if you actually HAVE a trusted mechanic to rely on. In my experience, the only way – outside of a personal relationship – for a mechanic to have earned that trust is for you to have spent a lot of time at the garage (which, of course, may be why you are looking for a different vehicle in the first place).

“Reasonable” Doubts?

Plan sponsors are increasingly looking for guidance on what constitutes reasonable, and – spurred by the flurry of recent 401(k) plan lawsuits and the increasing level of scrutiny applied by regulators and lawmakers – have, logically, tended to be dominated by a focus on fees.

It’s hard to argue with the “clarity’ of that focus, but what do you think would be the result if my used-car purchase used cost as the only criterion? All things being equal, cost may be a perfectly adequate point of differentiation, but all things are seldom “equal.’ When it comes to used cars, common sense dictates that a vehicle in better condition could well be worth more than an identical make and model that has been handled roughly. And we all know of “cheap’ car purchases that have more than made up for that initial price differential in terms of subsequent trips to the repair shop.

Things are even more complicated with retirement plans, where plan design flaws are often obscured, and where subtle restrictions and operational limitations don’t appear until well after that finals presentation. Fortunately, ERISA doesn’t require “cheapest.’ However, it does call for plan fiduciaries to make decisions that are solely in the best interests of plan participants and beneficiaries, to ensure that those decisions culminate in the selection of services (and fees for those services) that are “reasonable’ – and to do so with the insights and perspective of an expert in such matters, or to enlist the support of those who are.

Failing that – “caveat emptor.’

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