DeVoe, meanwhile, thinks that the record M&A pace witnessed by Schwab could have been a short-term bump suggesting that negotiations put on the back burner in 2009 were simply consummated later in 2010.


Forum Gives First Ever Innovation Award To Putnam
The Innovation and Growth Forum named Putnam Investments the inaugural recipient of its Innovation Award for its successful launch of its series of absolute return funds. Putnam introduced the four funds in early 2009 as an alternative to traditional retirement investments, and since they debuted the funds have attracted about $3.3 billion in assets.

"We are honored to be the initial recipient of this prestigious award, which reflects the commitment to innovation that has characterized Putnam Investments during the past three years," Putnam Chairman and CEO Robert Reynolds said. The funds "seek to address an array of investment needs, including the dampening of market volatility, generating more dependable returns and helping to mitigate potential inflation and longevity risks, all of which are paramount to the confidence of financial advisors and investors."

Putnam had been using the absolute return funds for institutional clients for several decades. When Reynolds arrived at Putnam in early 2008, these institutional vehicles were among the few top performers in the mutual fund complex's product lineup.

The timing of the launch in the middle of the financial crisis in early 2009 proved to be propitious, since many investors were fleeing the equity markets and interest rates were at a historic low. In an interview in late 2009, Reynolds told Financial Advisor that he was convinced absolute return funds would become mainstream alternatives for the future wave of retirees and that, as a result, people wouldn't have to invest a large chunk of their assets in cash.

The forum was jointly organized and co-sponsored by Spectrem Group and Financial Advisor magazine in early 2009 to provide an idea exchange for the financial services industry as it tried to reinvent itself in the wake of the financial crisis. It received 41 nominations for the award, and 25 nominees were asked to provide more information. MembersĀ  ultimately voted on 11 of 25 nominations that met the deadline for submission and chose Putnam.


SEC Seeks Higher Limits For Charging Performance Fees
The Securities and Exchange Commission plans to adjust two tests that registered investment advisors must use to determine if they can charge performance-based fees. The changes would result in about 195,000 households no longer being considered "qualified clients."

Current SEC rule 205-3 under the Investment Advisers Act of 1940 requires that clients must have at least $750,000 under management or a net worth of more than $1.5 million if they are to be charged performance-based fees. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that by July 21--and every five years thereafter--the SEC adjust for inflation these dollar-amount tests. The current standards were set in 1998.

The SEC plans to amend the rule by raising the assets-under-management test to $1 million and the net-worth test to $2 million. The revised dollar amounts reflect inflation as of the end of last year. The amendment would specify that the PCE Index will be the inflation index used to calculate future inflation adjustments.

Also, the SEC proposes to adjust the net-worth standard for a "qualified client" to exclude the value of a person's primary residence and debt secured by the property that is no greater than the property's current market value. If the outstanding debt exceeds the market value of the residence, the amount of the excess would be considered a liability in calculating net worth.

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