Hunter
was previously managing principal and chief financial officer. He has been with
Commonwealth for 25 years, overseeing all financial activity for the company.
Peter
Wheeler will assume the title of vice chairman. These management changes will
support the controlled, strategic growth of the firm. Wheeler,
continuing his almost three-decade career at Commonwealth, will retain
oversight of legal and compliance; he will also focus on long-term executive
management responsibilities and strategic planning.
In
May, Commonwealth created a senior vice president title and promoted seven
managers to this role within their departments: John Bohsin brokerage operations; Simon Heslopin asset management; Jim Hommeyerin strategic and tax planning; Carly Maher in sponsor relations
and conferences; Gavin Morrissey in wealth management; E.J. Sutherland in information
technology; and Paul Tolley in compliance.
Commonwealth
Financial Network is a privately held independent broker/dealer and registered
investment adviser.
The Securities and Exchange Commission (SEC) voted Wednesday to propose
rules that would reform the way money market funds operate to make them less
susceptible to runs that could harm investors.
The SEC’s proposal includes two principal alternative reforms that could be
adopted alone or in combination. One would require a floating net asset value
(NAV) for prime institutional money market funds. The other would allow the use
of liquidity fees and redemption gates in times of stress. Additional
diversification and disclosure measures would apply under either alternative.
The commission attempted to propose reforms last summer but was unable to reach
a consensus to support the changes. (See “SEC
Backs Down On Proposal—For Now.”)
The proposal does not directly affect registered
investment advisers (RIAs)—it has more of an economic impact on the fund
industry and institutional shareholders of money market funds, according to
Duane Thompson, senior policy analyst at fi360.
“However, if adopted as proposed, it can affect some RIAs whose clients
hold both institutional and/or retail class shares of money market funds,”
Thompson told PLANADVISER. “As such, if institutional shares go to a floating
daily value, then RIAs with access to both share classes will have to track
share values differently, and assess the benefits and risks of each for their
clients.”
The SEC began evaluating the need for money market fund reform after the
Reserve Primary Fund broke the buck at the height of the financial crisis in
September 2008. “Our goal is to
implement effective reform that decreases the susceptibility of money market
funds to runs and prevents events like what occurred in 2008 from repeating
themselves,” said Mary Jo White, chair of the SEC.
Any final SEC action changing the requirements for
money market funds should be reviewed by RIAs from a fiduciary standpoint,
since their duty is to assess the suitability of a product and match it
appropriately to a client’s risk tolerance, Thompson said, and consider whether
other fixed-income instruments are preferable.
“Since the federal government is no longer able to
guarantee money market funds as it did after the Prime Reserve episode in 2008,
advisers will have to judge for themselves whether the SEC’s reform efforts are
adequate in protecting client assets from a future run on money funds. Even if
the SEC fails to take further action, its efforts are nonetheless a reminder
that, while experts may disagree on the amount of risk posed by money market
funds, most investors do not understand the potential risk involved.”
We
applaud the SEC for listening to concerns about unintended consequences for
small investors who rely on money market funds, based on our initial readings of
the proposals, said Chris Paulitz, a spokesman with the Financial Services
Institute. “Both alternatives would preserve a stable NAV for investors, which
is critical,” Paulitz told PLANADVISER. “We are studying and will provide
detailed comments to the SEC, and encourage our members to provide input as
well.”
A link to the SEC release is here, with a fact sheet on money market funds, their history and how they were affected during the financial crisis.