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The CFA Institute Centre for Financial Market Integrity’s 2009 Financial Market Integrity Index (FMI) report for the United States reflects CFA charterholders’ current soured sentiments and shaken faith in the ability of U.S. investor protections to ensure an orderly functioning of the equity markets.

The FMI gauges CFA charterholders’ perceptions of ethics and integrity in six markets worldwide and how these perceptions change over time. It also measures the level of integrity — the ethics of market participants and the effectiveness of market systems in ensuring integrity — that charterholders experience in their respective markets: Canada, Hong Kong, Japan, Switzerland, the U.K., and the U.S.

Of all those in the financial professionals category, ratings for corporate boards and corporate executives dropped the most between 2008 and 2009, suggesting respondents perceive these particular types of professionals to be most responsible for the current financial crisis.

Based on their perceptions of market ethics and integrity, only 49% (versus 68% in 2008) of in-market respondents were likely or very likely to recommend investing in U.S. markets. Those outside the U.S. responded comparably, at 43% in 2009 versus 67% in 2008.

“It’s instructive to see how ethics ratings changed in the year of economic crisis,” said Kurt Schacht, managing director of the CFA Institute Centre. “While somewhat expected, it’s troubling to see how significantly ethics factors have deteriorated overall as a reflection of trust and confidence in markets.”

The FMI survey asked respondents their opinions on the ethical behavior of various financial professionals, from buy-side analysts to hedge fund managers. The largest decline in sentiment was recorded in the rating for corporate boards of public companies — from a 3.2 in 2008 to a 2.8 in 2009.

CFAs participating in the survey gave U.S. regulatory and investor protections a less-than-adequate rating of 2.8; and those in the U.S. are clearly the most displeased with the U.S. regulatory system.

Respondents also expressed concerns about the state of transparency in U.S. markets. When asked about their likelihood of recommending investment in the U.S. market, based solely on their perception of ethical behavior and capital market system effectiveness, fewer than half of U.S. CFA charterholders — 49% — said they were very likely/likely to do so, compared with 70% in 2008.

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Sun Life Financial to expand MFS Investment Management

Spurred by client interest, Sun Life Financial announced broad expansion of its MFS Investment Management unit’s global investment and distribution platforms.

MFS experienced strong net sales growth in 2009, reflecting the solid relative performance of its investment line-up along with its extensive global distribution capabilities.

The firm is now targeting new equity research analysts stationed in key and growing emerging markets, as well as specialists in quantitative analysis and tactical asset allocation. Within distribution, it plans to bolster operations in relationship management, dealer relations and sales to support expanding global retail and institutional distribution.

“[MFS’s] excellent historical investment performance is a result of its distinctive team-approach to managing money. We intend to build on these strengths, while allowing MFS to continue to prosper organically through investments of up to US$50 million in the firm’s infrastructure,” said Kevin Dougherty, president of Sun Life Global Investments.

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TD launches website for customers facing financial hardship

TD Canada Trust launched a new Web site, TD Helps, with a full on-line marketing campaign. The site is helps customers with worries about credit card debt, mortgage payments and bill payments. It will also feature videos of employees explaining how they were able to help their customers.

“We thought and hoped a lot of our customers would identify with some of the situations our employees have helped with, and their stories would encourage people to come and see us sooner,” says Tim Hockey, president and CEO of TD Canada Trust.

The site features:

— encouragement for customers to talk to advisors early about financial problems; — video interviews sharing real life examples of customers they helped; — opportunity for customers to comment on the videos; and — information about how to contact them for help with credit card debt, mortgage payments and bill payments

This is the first time the bank has ever opened up its own site for comments.

“We’re pretty excited about that,” says Hockey. “Customers are going to be able to share their thoughts about the videos and the stories our employees are telling and we are eager to hear what they have to say.”

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Pay raises to return in 2010

According to Watson Wyatt, pay raises for U.S. workers are expected to rebound in 2010.

Respondents from the Watson Wyatt 2009/2010 U.S. Strategic Rewards survey anticipate median merit increases of 3% for 2010. Prior to the recession, companies projected a 3.5% merit increase for 2009 and now expect pay increases to total 2% for 2009.

“This has been a very difficult year for both employers and their workers,” says Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “But there is some good news on the horizon. Employers plan to give larger raises next year, and many plan to reinstate previously cut pay raises as planning for an eventual economic recovery continues.”

The survey also found companies are giving smaller raises to employees who do not meet performance expectations. In 2009, workers who “partially met expectations” will receive median merit increases of only 0.2%, down from 1.5 percent in 2008. Workers who “exceed expectations” will receive a median 3.1% increase and workers who “far exceed expectations” will receive a 4% increase.

A separate survey from Watson Wyatt Data Services, also found fewer companies plan to eliminate pay raises in 2010. Only 10% of companies surveyed are planning to eliminate pay raises for workers in 2010, down from 25% of companies in 2009.

(07/22/09)