A well-respected registered investment advisor was recently named as a defendant in a class-action lawsuit against a $1 billion 401(k) plan.
I’m not going to cite the particulars and I’m not going to opine because a complaint filed in Federal court isn’t evidence that this advisor did anything wrong. The point is that no matter the processes you put in place or the respect that you have in the industry, you can get sued in a class action lawsuit as a plan provider whether you have done anything wrong or not.
You can never keep your eye off the ball and you have to understand the pressures that come when dealing with plan costs, revenue sharing, and share classes. There are ERISA litigators hunting for plans to sue and these issues I just named are currently the issues being litigated about. Only constant vigilance will keep more than a step away from getting sued.