As an Accredited Investment Fiduciary, this is the compliance area that worries me the most. In the last week, notice of suit has been filed against Everett Jones, Cornell University, Northwestern University, Columbia University and the University of Southern California. These suits allege excessive fees, and alot of that comes from requiring “proprietary funds” in the plan. A clear example of this seems to be Edward Jones, as the suit alleges that employees are required to invest in high-fee Funds owned/controlled by Edward Jones.
To be clear, none of these companies have been found guilty, and may in fact be found innocent. It is simply this – excessive fees is the current “hot” lawsuit – and clearly it is avoidable. Why set your company up for this?
My clients wonder why I provide them an annual fee benchmarking reports, and monitor the investments so closely, and the answer is simple – to avoid this issue in the first place.