401(k) service companies under additional scrutinyNews added by Benefits Pro on May 1, 2012

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Joined: September 07, 2011

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By Andy Stonehouse

As part of the upcoming round of fee disclosures, there's also set to be increased federal scrutiny on service providers - and even more legal action as participants come face to face with the real costs of their 401(k) investments.

According to a Reuters article, an uptick in Deparment of Labor examinations of brokerage firms, third-party administrators and RIAs is part and parcel of the new fee disclosure regulations - a move which has attorneys representing the service industry concerned.

Legal action over conflicts in compensation and costs have already occured: last week, firm Morgan Keegan agreed to pay $634,000 to 10 retirement plans after DOL investigations discovered the firm took kickbacks for hedge-fund investment sales.

Class-action suits over fees will turn up the heat on service providers, and more is expected to come as the deadline for fee disclosures comes closer.

Originally published on BenefitsPro.com
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