401(k) service companies under additional scrutiny
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