Advisers Catch the Ripple Effect as Fee, Underperformance Litigation Increases

Lawsuits against plan sponsors are no longer a rarity within defined contribution retirement plans and are bleeding into the responsibilities and duties of plan advisers.

PLANADVISER 360 Litigation Lessions (photo by Anthony Collins)

In a Tuesday afternoon discussion at the PLANADVISER 360 Conference in Orlando, Florida, “Litigation Lessons,” Andrew Salek-Raham, a principal and litigation practice leader at Groom Law Group, said plan advisers are increasingly being named defendants or needing to provide evidence in suits against their clients over plan investment performance and plan fees.

According to Salek-Raham, such litigation has risen to about 600 cases filed in the past 10 years. In 2025, there were nearly 100 cases, and Salek-Raham said 2026 was on pace to reach 120.

With the lawsuits increasing, this points to the importance of advisers remaining vigilant and prepared for any compliance concerns that may arise in their practice.

Documentation Is Everything

Technically, there are no legal requirements that fiduciaries keep minutes, but the panelists recommended that plan advisers implement a prudent process for documentation, so essential details are written and accessible in case of an emergency.

Eric Dyson, executive director at 90 North Consulting LLC, who used to be an adviser and now often serves as an expert witness, said committee meeting minutes should be viewed as an essential part of the fiduciary process rather than an administrative burden.

While advisers may receive guidance not to overload minutes with unnecessary detail, he noted that many plans face the opposite problem.

“What I see as a problem is there’s not enough information,” Dyson said.

He also emphasized that minutes should demonstrate not only the process fiduciaries followed, but also the rationale behind their decisions and how those decisions were made in participants’ best interests. Advisers were also cautioned to ensure that investment reviews align with the requirements outlined in a plan’s investment policy statement, if the client has one.

”I’ve seen a lot of poorly written investment policy statements,” Dyson said, adding that inconsistencies between investment policies and investment reviews can create challenges when a plan’s process is scrutinized during a lawsuit.

He also said advisers could be asked to provide evidence or could even be named a defendant in such lawsuits.

“The real issue is if you are deposed. That’s a lot of time, effort and energy on your part, supporting the clients and, really, figuring out how not to get yourself messed up in the whole fray … while at the same time supporting your client,” he said.

Salek-Raham agreed documentation plays a key role when litigation arises, noting that advisers are often asked to help gather and organize records, evaluate defenses and support plan sponsor clients throughout the discovery process and, in many cases, depositions.

“Getting sued is certainly the time your clients are looking to you to help fulfill that [mitigation] role,” Salek-Raham said. “It could be simply collecting documents your clients may have that they may need, to evaluate the strengths of their defense.”

Both speakers also stressed the importance of being mindful of communications, especially once litigation becomes a possibility. Salek-Raham advised attendees to remember that emails and other written communications may become evidence in court, while Dyson encouraged advisers to consult legal counsel when a lawsuit is filed.

Reviewing Investment Policy Statements

The panelists also urged advisers to pay close attention to the language used in investment policy statements, which frequently become central exhibits in litigation involving investment performance.

Dyson said many investment policy statements often need work or fail to reflect how investment reviews are actually conducted.

“Poorly written investment policy statements far outnumber the well-written investment policy statements,” he said.

Because investment performance claims account for many of the industry’s largest lawsuits, he urged advisers to regularly review those documents and ensure clients understand them.

“Investment performance is where the majority of the damages are,” Dyson said.

Salek-Raham said advisers should avoid using overly prescriptive language in an IPS whenever possible. Instead of requiring committees to take specific actions under certain circumstances, policies should provide flexibility to evaluate investments based on multiple factors and evolving circumstances.

From a litigation perspective, Salek-Raham said, plans are generally better served by language that allows fiduciaries discretion in carrying out a prudent process rather than creating rigid mandates.

“It’s best to use ‘may’ rather than ‘shall’ language,” he said. “The more flexibility you can build in, the better.”

More on this topic:

	Keeping Firms’ Social Media and Marketing Compliant
	Considering Which Parts of Compliance to Outsource
	Documenting a Provider Change: A Committee’s Playbook