Oisin Breen

IMO- the real risk for 'fiduciaries' is not being able to follow/document and defend the decision making process.  There is zero evidence to suggest anyone can consistently select out performing investment strategies prospectively...the Alpha Fairy comes and goes, if it exists at all.  The other point, as related to TDF's misses the mark- the majority of returns (look at any academic research) comes from asset allocation and not from underlying investment choices.   There's plenty of room to take action against the sponsor/advisor but what they have laid out doesn't make a lot of sense.

Laughable, if it wasn't so sad.  DOL needs to do a better job of defining "prudent investing" for the benefit of all sponsors, but again they write regulations/guidance of their own that leave far too much room for interpretation.  We're on a slippery slope that leads to nowhere.  I would also say that there should be some penalty for "class action" lawsuits brought that don't have merit in the judges eyes.

Making lemonade of legal lemons, new wave of ERISA class actions accuse fiduciaries of 'imprudently' using low-fee, high-rated funds, like BlackRock TDFs

The days when RIAs were the outsiders at the 401(k) party are fast coming to a close. What's new is that the mass of 401(k) assets 
is getting critical at about $3 trillion; fiduciary advisors are getting appreciated; fat fees and questionable kickbacks are getting exposed and stepping out of line is getting dicier as the Department of Labor tightens the regulatory screws.

The old reasons why the 401(k) business is attractive are still in place: there are fresh assets pouring in every month and when employees leave jobs or retire, they produce rollovers that build up IRA accounts for financial advisors. The drawbacks of getting into the 401(k) business are still in place, too. Dealing with retirement assets is really a second line of business and it remains -- unless you overcharge with hidden fees -- a low margin business with high potential fiduciary liabilities.

Still, the outsourcers, infrastructure and accumulated knowledge for RIAs to capitalize on is growing daily and a the mega-shift of assets away from brokers is making the 401(k) business riskier and riskier -- to ignore.

401(k) Stories

The lawsuits against 401(k) plan sponsors also threaten every RIA and fiduciary, if underperformance becomes a legal liability, lawyers say.

Making lemonade of legal lemons, new wave of ERISA class actions accuse fiduciaries of 'imprudently' using low-fee, high-rated funds, like BlackRock TDFs

FAA

Brian Murphy

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