Latest ERISA Court Actions Offer New Guidance to Fiduciary Practitioners

Blaine Aikin, AIFA®, CFP®, CFA, Executive Chairman, Fi360 and CEFEX

Duane Thompson, AIFA®, Senior Policy Analyst, Fi360

April 24, 2019

After an onslaught of new fiduciary breach claims hit the financial services industry and universities three years ago, most of the four-dozen-plus ERISA class-actions are still working through the legal system as fiduciaries increasingly search for answers.  A handful of cases have gone to trial, with many going on to appeal, and with a substantial number reaching settlement, sometimes just hours before trial.  Combined, these latest court actions offer valuable lessons on prudent investment management practices covering a wide range of specific claims that go beyond the excessive fee label typically applied to these cases.  Some of the related claims include failure by the plan’s investment committee to prudently select and monitor or replace underperforming investments – including money market instead of stable value funds – failure to use lower-cost share classes for the same fund, and imprudent selection of active versus passive investments.  The list goes on. Helping to sort out the most important takeaways from this sheer volume of litigation are Blaine Aikin, AIFA®, CFA and CFP®, Executive Chairman of Fi360, and Duane Thompson, AIFA®, Senior Policy Analyst.  They provide insights into how thoughtful fiduciary advisors can improve their own due diligence processes and avoid some of the pitfalls uncovered in this latest wave of ERISA litigation – while at the same time more effectively serving the best interests of their institutional and retail clients.

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