Allianz Hires 11 Annuity Wholesalers

By John Sullivan

Good news for employment prospects in the financial services sector. Allianz Life Insurance Company of North America today announced the hiring of 11 regional vice presidents for Allianz Life Financial Services, LLC. Each vice president will help develop a specific territory by increasing sales and brand loyalty with existing producers as well as new producers. Sales efforts will focus on financial advisors at large broker-dealers, banks and wirehouses.

"It's vital that our sales teams make strong connections with the financial advisors that offer our variable and fixed index annuity products to consumers," said Richard Healey, senior vice president and head of sales for Allianz Life Financial Services, LLC, in a prepared statement. "We are pleased to have these talented individuals join the Allianz team and help us communicate the benefits of our innovative retirement solutions."

The new regional vice presidents include:

Tim Knight - Knight will focus on the wire channel in the South Central District (Oklahoma and Northern Texas). Most recently, Knight was Life Insurance Product Manager with First Command Financial Services and has also held positions with Transamerica Capital and Guardian Life. Knight holds a Bachelor of Arts Degree from the University of North Texas.

Jack Graugnard - Graugnard will be in the South Central District (Louisiana and Mississippi) focusing on all channels. Most recently, Graugnard was a wholesaler with Lincoln Financial Distributors/Delaware Investments and has also held positions with Franklin Templeton Investments and Amsouth Investments. Graugnard holds a Bachelor of Arts Degree from Louisiana State University.

Katie Ehrsam- Ehrsam will focus on the wire channel in the West District (Colorado). Most recently, Ehrsam was a Strategic Accounts Associate with Allianz Life Financial Services, LLC and was also a territory sales representative with G&K services in St. Paul. Ehrsam holds a Bachelor of Science Degree from the University of Wisconsin-Eau Claire.

Shawn Lewis - Lewis will be in the South Central District (Arkansas, Missouri and Kansas) focusing on the wire channel. Most recently, Lewis was a Regional Vice President with Lincoln Financial Distributors and has also held positions with Pacific Life, MFSLF/Sunlife Financial and Jackson National Life. Lewis holds a degree from Richard Stockton College of New Jersey.

Lynn Berger - Berger will focus on the independent channel in the Northeast District (Western Pennsylvania and West Virginia). Most recently, Berger was a Regional Marketing Director with PLANCO, the financial services distribution division of The Hartford, and has also held positions as an Internal Sales Representative and Sales Coordinator with the company. Berger holds a Bachelor of Arts Degree from West Chester University of Pennsylvania.

Doug Zweig - Zweig will help the Midwest District (Illinois) by focusing on the independent channel. Most recently, Zweig was an Internal Wholesaler for Allianz Life Financial Services, LLC and has also held various positions with Speer Financial in Chicago. Zweig holds a degree from Drake University.

Steve Beck - Beck will focus on the independent channel in the South Central District (Arkansas, Oklahoma and Northern Texas). Most recently, Beck was a wholesaler with John Hancock in Boston and has also held positions with Nationwide and Fidelity Investments. Beck holds Bachelor's and Master's Degrees from Oklahoma State University.

Janette Ortiz - Ortiz will help lead the Northeast District (New York City and Long Island) focusing on the wire channel. Most recently, Ortiz was a Regional Annuity Sales Manager for MetLife and has also held various positions with Merrill Lynch. Ortiz holds a Bachelor of Science Degree from Regis College.

Patrick Cahill - Cahill will focus on the wire channel in the Mid-Atlantic District (Northern Pennsylvania and Northern New Jersey). Most recently, Cahill was a National Sales Manager for ING Wealth Management and has had held various positions with the company including National Business Development Manager, Regional Vice President and Internal Wholesaler. Cahill holds a Bachelor of Arts Degree from St. Joseph's University.

Eric Motzkus - Motzkus will help lead the West District (Utah, Montana, Wyoming and Idaho) focusing on all channels. Most recently, Motzkus was Regional Vice President with Pacific Life Mutual Funds and Annuities and has also held positions with Nationwide Investment Services and Fidelity Investment Institutional Services. Motzkus holds a Bachelor of Science Degree from the University of Utah.

Michael Giles - Giles will focus on the independent channel in the Mid-Atlantic District (Maryland and Washington DC). Most recently, Giles was a Regional Vice President for ING USA Annuity and Life Insurance Company and has also worked as a financial advisor for American Express Financial Advisors. Giles holds a Bachelor of Arts Degree from the University of Richmond.

Healey added, "By building out our regional wholesaling team, Allianz is better positioned to help financial professionals create retirement plans that meet their clients' long-term financial objectives."

Envestnet IPO Stock Starts Trading on NYSE

By James J. Green

Ringing the bell to start the day of trading at the New York Stock Exchange on Thursday, July 29, Envestnet Inc. formally became a public company under the ticker ENV. On July 28, Envestnet, the Chicago-based investment and technology platform provider to advisors, priced its IPO of 7 million shares of common stock at $9.00 per share. Envestnet closed its first day of trading at $10.25 per share, up 13.9%.

In its original S-1 filing with the SEC in May 2010, the 10-year-old company said it hoped to sell $100 million of stock in its IPO.

In an interview after ringing the NYSE bell on the 29th, founder, chairman, and CEO Judson Bergman said the company's primary focus moving forward was to continue to "organically grow" its advisor business, noting that over the past few years the firm had grown the number of advisors using its technology and investing platform by 12% (to 19,000 advisors, with Envestnet managing or administering $100 billion in assets), that those advisors had grown their own businesses at an 18% clip, and that the overall number of end-user accounts at Envestnet had grown 32%.

Bergman said that "we have the broadest, deepest, most integrated wealth management platform," and that in addition to organic growth, the company would consider adding either portfolio management or technology solutions to its platform, all to give advisors the tools they need to help scale their businesses, but also to incorporate a fiduciary standard of care, and to help advisors monitor their progress toward building businesses where "they have their clients' best interests in mind," rather than just what it is suitable.

In May, Envestnet managing director of advisor-managed programs, Jim Patrick, discussed the IPO in light of the company's strategic plans.

Envestnet's portfolio consulting arm, Envestnet PMC, earlier in July announced a partnership with Singer Partners.

Nuveen Acquires First American Funds Advisors

By James J. Green

Nuveen Investments announced Thursday, July 29, that it had acquired the long-term asset business of First American Funds Advisors (FAF) from U.S. Bancorp in exchange for a 9.5% stake in Nuveen and an undisclosed amount of cash. The company said it expected the transaction to close later this year.

Nuveen will incorporate FAF, the advisor to First American Funds, and its $25 billion in assets into Nuveen Asset Management, which already has $75 billion in municipal bond assets under management. The combined firm will operate under the name Nuveen Asset Management with operations in Chicago and Minneapolis.

In a statement, Nuveen Investments' chairman and CEO, John Amboian, said the entity will combine Nuveen Asset Management's "market-leading municipal bond expertise with FAF's proven and distinct investment capabilities including taxable fixed income, real assets, equities, and asset allocation."

Following the transaction, Tom Schreier, currently CEO of FAF, will become vice chairman, wealth management, of Nuveen Investments. Bill Huffman, current co-head and COO of Nuveen Asset Management, will become the president of the combined businesses, reporting to the Office of the Chairman of Nuveen Investments through Schreier.

In its statement, Nuveen said the investment products managed by the investment teams within Nuveen Asset Management would be offered under the Nuveen brand name and "possibly, for legacy First American Funds, the Nuveen FAF brand name."

The other investment management firms within Nuveen include NWQ Investment Management, Santa Barbara Asset Management, Symphony Asset Management, Tradewinds Global Investors, Winslow Capital, and Nuveen HydePark.

A portfolio in Nuveen's Tradewinds Global Investors was a winner of the Investment Advisor 2010 Separately Managed Account Managers of the Year in the Specialty category.

SEC's New Powers Affect Hedge Fund and Private Equity Advisors

By Michael S. Fischer

Alternative investment advisors who have business in the U.S. or, in some instances, even tangential relationships with U.S. investors will be required to register with the Securities and Exchange Commission (SEC) under newly enacted regulatory reform legislation, according to a statement issued by Kinetic Partners on Wednesday, July 21.

The statement summarizes some of the most important aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act that affect hedge fund and private equity advisors, and lists key requirements advisors must focus on when registering with the SEC. President Obama signed the act into law on July 21.

"Not only will most investment advisors now be required to register, they will also be faced with more onerous reporting obligations," Neil Morris, a member of the operational risk group at Kinetic Partners, said in the statement. "Therefore, advisors need to consider how they will respond to the heightened scrutiny and the SEC's new demands."

The Dodd-Frank Act eliminates the so-called private advisor exemption, which many advisors have used to establish open-end hedge funds and unregistered private equity operations. According to Kinetic, the amount of assets under management and the types of clients or investors they serve will determine which investment advisors will have to register. Those with AUM of $150 million or more will be required to register with the SEC. Advisors with AUM between $25 million and $150 million will have to register with a state regulator.

Non-U.S. investment advisors will be exempt from registration if they have no place of business in the country, have less than $25 million of investments from U.S. investors and fewer than 15 U.S. investors, and generally do not represent themselves to the public in the U.S. as investment advisors. Others exempt from registration are venture capital fund advisors, family offices and registered commodity trading advisors.

Registration provisions will take effect on July 21, 2011.

Kinetic said that under the new legislation, the SEC will be able to request information, other than records already required, as it deems necessary to protect investors and to assess systemic risk.

The statement listed major requirements for registered advisors and for compliance with the Investment Advisors Act of 1940, as amended:

• Compliance manual and code of ethics tailored to the advisor's business
• Employee investment policies
• Appointment of chief compliance officer
• Compliance monitoring program tailored to the adviser's business
• Submission of Form ADV I, and preparation of Form ADV II (http://www.wealthmanagerweb.com/News/2010/7/Pages/SEC-Approves-Changes-to-Form-ADV-Part-2.aspx) (and Schedule F)
• Books and records retention
• Risk assessment and annual compliance reviews
• Employee training
• Disclosure of conflicts to investors

BofA's Krawcheck Unveils Merrill's Affluent Investor Survey

By Kate McBride

Affluent investors are looking for "financial peace of mind," but that, said Sallie Krawcheck, "is missing," for many investors. On a conference call on Wednesday, July 28, Krawcheck, president of Bank of America Global Wealth & Investment Management (GWIM), revealed the results of the Merrill Lynch Wealth Management Affluent Insights Quarterly survey of 1,000 affluent investors--which Merrill Lynch defines as those with $250,000 or more in investable assets. Some investors are worried about a double-dip recession, "or Japan type of scenario," Krawcheck added.

The concerns these investors have appear to be growing broader and stronger. What do they worry about most? Many, 42%, are concerned about "maintaining their family's standard of living," and 40% worry about "health care costs," according to the survey. It is the basic things, such as "saving/investing for retirement," that concern 37%; "replenishing savings to pre-recession levels" (35%); "daily/monthly expenses" (33%); "college education costs/savings" (31%); and "mortgage payments," (25%).

Many affluent investors cited family obligations: they had "added financial responsibilities," such as "caring for an elderly parent or relative," (45%), or an "adult child," (36%), said Dean Athanasia, head of GWIM Banking and Merrill Edge, also on the call.

Delayed Retirement Krawcheck added that now, more affluent investors, 45%, "expect to retire later" than they had anticipated. That's way up from last quarter, when 31% said that, and 29% who indicated that in January, she explained.

Retirement is an area of fairly widespread worry: "70% don't think their retirement plan thoroughly takes into account the potential for unexpected events," according to Lyle LaMothe, head of U.S. Wealth Management for Merrill Lynch Wealth Management.

Perhaps the most surprising statistic in the survey results was that nearly twice as many affluent investors said teaching their children "financial know-how" was a higher priority than teaching them about "choosing the right spouse/partner." Here, 51% opted for "financial know-how," and only 26% said "choosing the right spouse/partner," was most important, according to the survey. Only "maintaining a close relationship with family" (54%), topped "financial know-how."

Surprise: A Risk-Averse Younger Generation Another surprising result of the survey was risk tolerance or aversion indicated by different age categories of investor. While you might expect that the older investors get, the more conservative they would be about investing, Krawcheck pointed out that the majority (52%) of "younger investors, 18 to 34, with a mean of 30," described themselves as conservative, meaning risk-averse and looking at very conservative investments. She noted that "first and last impressions count," and that these investors saw the Internet bubble burst and now see the ongoing market and economic turmoil. They are the second most conservative category, while only 45% of those in the group of 35- to 50-year-olds described themselves as conservative when it comes to risk. The most conservative are those 65 and older, with 55% saying that they are risk averse. Overall, 50% of those surveyed said they had a "low tolerance for risk."

Comments? Please send them to kmcbride@wealthmanagerweb.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.