The Bucket

Late-breaking briefs about AXA Equitable, Prudential Financial, Principal Financial, MassMutual, Securian, TIAA-CREF and FINRA.

AXA Equitable names pair to executive team

 AXA Equitable Life has named Nick Lane and Rino Piazzolla to its executive management team–Lane as senior vice president of Retirement Savings and Piazzolla as senior vice president of human resources.

Both will report to Mark Pearson, 52, who will become AXA Equitable’s chairman and CEO on February 11. Pearson had been CEO of AXA Japan.

Lane, 37, had served as head of AXA Group Strategy in Paris since 2008. Prior to that, he was a director of AXA Advisors, LLC and vice chairman of AXA Network, LLC, AXA Equitable’s retail broker dealer and insurance general agency, respectively. Previously, Lane was a leader in the sales and marketing practice of the strategic consulting firm McKinsey & Co. He holds a B.A. from Princeton University and an M.B.A. from Harvard Business School and served as a captain in the U.S. Marine Corps.

Piazzolla, 57, most recently was UniCredit’s head of Human Resources in Italy. Before joining UniCredit in 2005, he held various human resources management positions in the U.S. and abroad at General Electric Co., PepsiCo and S.C. Johnson Wax. He succeeds Jennifer Blevins, 53, who is retiring after nine years. 


FINRA arbitrators rule for retiree, to tune of $136,000 

A retired California woman won a six-figure damages award against Smith Barney (now Morgan Stanley Smith Barney) to compensate her for investment losses caused by the Wall Street firm’s recommendation that she buy preferred shares of GM stock not long before the company’s bankruptcy.    

On November 18, 2010, a Financial Industry Regulatory Authority (FINRA) arbitration panel ruled that a Smith Barney advisor in Whittier, Calif., unsuitably recommended that Joanne Bohnke invest a substantial portion of her retirement savings in preferred shares of GM in 2007, not long before the auto maker’s bankruptcy. She lost three-fourths of her investment. The panel awarded her $136,000. 


“This Time Is Different” wins TIAA-CREF award   

Carmen M. Reinhart and Kenneth S. Rogoff won the 2010 TIAA-CREF Paul A. Samuelson Award for their best-selling book, “This Time is Different: Eight Centuries of Financial Folly.”

Reinhart is the David Weatherstone Senior Fellow at the Peterson Institute for International Economics and Rogoff is the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard.  

The Samuelson Award is given annually in recognition of an outstanding research publication containing ideas that the public and private sectors can use to maintain and improve America’s lifelong financial well being. The winner receives $10,000.

“Combing through data from 66 countries and across five continents, Reinhart and Rogoff focused on patterns of currency crashes, high and hyperinflation, government defaults on international and domestic debts, housing and equity prices, capital flows, unemployment and government revenues to demonstrate that these crises are not isolated events. Reinhart and Rogoff show how closely each of these events fit a discernible and predictable pattern through the last eight centuries,” TIAA-CREF said in a release.

The TIAA-CREF Institute presented the Samuelson award on January 7 in Denver during the annual Allied Social Science Associations annual convention.


Prudential Investments Launches Real Assets Mutual Fund

Prudential Investments, the mutual fund family of Prudential Financial announced the launch of the Prudential Real Assets Fund, a mutual fund that focuses on investments in real estate, metals, fuel, and other commodities.

The fund will also invest in Treasury Inflation Protected Securities as a hedge against inflation and interest rate risk.   

“Investing in real assets may also help prove beneficial if the rising U.S. deficit, coupled with reduced tax revenue, puts upward pressure on interest rates and inflation,” said a Prudential release.

“According to data from Ibbotson Associates, when the Federal Reserve raised interest rates from 1.00% to 5.25% percent between June 2004 and June 2006, real assets post-inflation returns produced average annual real returns of 9.35%, versus 4.56% for stocks or the 0.34% loss for bonds.”

The fund’s dynamic asset allocation strategy is led by Quantitative Management Associates, which manages nearly $40 billion in asset allocation strategies, including real assets.


Principal endorses investment principles

Principal Global Investors, the Des Moines, Iowa-based asset manager with $227.4bn (€170bn) in mostly pension fund assets under management, has become the latest “mainstream” firm to sign up to the United Nations Principles for Responsible Investment, according to
The firm, a unit of Principal Financial, runs assets for 10 of the 25 largest pension funds in the world, says “the appropriate consideration of environmental, social and governance (ESG) issues is part of delivering superior risk adjusted returns.”
Other recent well-known asset manager signatories include Capital International, Legal & General Investment Management and T. Rowe Price.   


$5.3 billion sets a sales record at MassMutual Retirement

MassMutual Retirement Services Division wrote over $5.3 billion in sales in 2010, breaking the record set in 2009. Assets under management in retirement plans administered by MassMutual reached a record $50 billion or so at year-end 2010 (including First Mercantile), up 16% increase vs. year-end 2009. The division reported net cash flow of about $2 billion for the second consecutive year.

MassMutual also earned record-high satisfaction levels in numerous 2010 industry and proprietary surveys of retirement plan advisors and plan sponsors, with a plan sponsor retention level of 95%.  

According to Hugh O’Toole, senior vice president and head of sales and client management for MassMutual’s Retirement Services Division, MassMutual has seen strong growth in its core defined contribution, defined benefit and TRS segments as well as in the nonprofit, Taft-Hartley, and professional employer organization (PEO) markets.


Securian Retirement certified by CEFEX

For the third consecutive year, the Centre for Fiduciary Excellence awarded Securian Retirement the CEFEX certification for fiduciary due diligence regarding investment management.

The CEFEX certification is used by benefits advisors, consultants, brokers, and their clients to assess the performance, consistency, and appropriateness of investment options. “The CEFEX certification is especially important in the markets we serve,” said Bruce Shay, executive vice president, Securian Financial Group, Inc. “Some employers do not have HR and legal experts on staff to monitor plan performance.”

Securian’s retirement plans are offered through a group variable annuity contract issued by Minnesota Life Insurance Company. The Securian due diligence process is led by an in-house committee of four CFAs who also hold the Accredited Investment Fiduciary designation.

CEFEX is an independent, global assessment and certification organization providing comprehensive assessments as measures of risk and trustworthiness of investment fiduciaries. A CEFEX assessment includes reviews of an organization’s practices by an independent Accredited Investment Fiduciary Analyst (AIFA).

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