Compliance May 13, 2011

BofA Merrill Lynch Faces Religious Bias Suit

A former Merrill Lynch branch manager has accused the firm of discriminating against him for being a member of the Church of Jesus Christ of Latter-Day Saints.
Reported by

Reuters reported that Brent Arave claims his boss told him “to change his LDS-like behavioral traits” if he wanted to keep working at the firm. According to a lawsuit filed with the California Superior Court in Riverside, the 25-year Merrill veteran said that for over a decade, he was encouraged by his bosses to recruit trainee advisers from his alma mater, Brigham Young University, which is affiliated with the LDS church. 

In August 2010, the firm conducted an anonymous employee survey, results of which included complaints that Merrill Lynch employed too many members of the LDS church and accused Arave of “preaching” LDS doctrine at work, according to Reuters. Following the survey, Arave said he was denied a request to transfer to another office, and that his boss demanded that he make a public apology to the advisers he managed for “creating an environment of favoritism to his personal religious beliefs.” 

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Arave said he submitted a formal complaint to the firm against his boss, Joseph Holsinger, and Katherine Anderson, a human resources manager who he accuses of ignoring his allegations about religious discrimination. The news report notes that Arave alleges the firm improperly informed the employees of his complaint, after which his work environment became so intolerable he was forced to leave. 

Arave is seeking unspecified damages on seven counts, including religious discrimination, harassment and wrongful termination, Reuters said.
 

Products May 13, 2011

Janus Rolls Out Real Return Allocation Fund

Janus Capital Group Inc. has launched the Janus Real Return Allocation Fund. 
Reported by

The fund aims to provide total returns that exceed the rate of inflation over a full market cycle, according to a company announcement. The fund will be managed by Janus Capital Management LLC in partnership with Armored Wolf, LLC.

Gibson Smith, Co-CIO, Fixed Income for Janus, believes many investors are not prepared to deal with the potential of higher inflation and the loss of purchasing power that may accompany it.  “As a nation, we are being forced to deal with the outcomes related to reflationary policy, a growing money supply, rising commodity prices and a rapidly expanding national budget deficit.” said Smith. “This new fund is aimed at helping investors confront inflation concerns.”

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Primary Focus

The Janus Real Return Allocation Fund will invest primarily in real asset strategies designed to generate attractive absolute, risk-adjusted returns while providing an active hedge against inflationary trends. The fund will allocate its assets among six sleeves: inflation-linked bonds, commodities, emerging market debt, emerging market equity, global real estate and short-term bonds. Each of these underlying sleeves is actively managed by portfolio managers at Janus and Armored Wolf.

According to John Brynjolfsson, Managing Director of Armored Wolf, traditional inflation-protected bond funds may not be enough to protect investors in a highly inflationary environment.  “With the current rate of inflation at historically low levels, investors should prepare for higher levels of inflation in the coming years,” said Brynjolfsson.

Primary oversight of Janus Real Return Allocation Fund will be provided by an allocation committee consisting of Smith and Brynjolfsson. They are responsible for determining the allocations between each sleeve as market conditions dictate.
 

«