Law Firm Investigates Possible M&I Fiduciary Breach to Retirement Plan

The law firm of Stember Feinstein Doyle&Payne, LLC is investigating whether Marshall&Ilsley (M&I) violated its fiduciary duties to its retirement program by maintaining investment offerings in certain M&I-owned mutual funds though many under-performed their peers.

Ellen M. Doyle of Stember Feinstein Doyle & Payne told PLANADVISER.com the firm was investigating another financial institution when it recognized the same problems existed at M&I. She also said several current and former employees of M&I have contacted the law firm.

“We believe that the detriment to the employees was tens of millions of dollars over the last three years because the funds underperformed and the fees were higher than average,” Doyle said in correspondence with PLANADVISER.com.

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According to an announcement from the law firm, the investigation will include determining the amount of fees that M&I generated by investments in the Marshall Funds within the 401(k) plan and whether these fees were a factor in the company’s decision to offer the poor-performing funds instead of other mutual funds with higher returns.

A request by PLANADVISER.com for comment from Marshall & Ilsley about the investigation has not yet been returned.

New York Life Insurance Co. last month agreed to a $14-million settlement of charges it improperly directed employees’ and agents’ retirement savings into its proprietary mutual funds (See Court Approves Settlement of New York Life Self-Dealing Case). Other similar cases against Wells Fargo (See 401(k) Participant Accuses Wells Fargo of Self-Dealing) and Citigroup (See Citigroup Hit with 401(k) Suit over ERISA Violations) are pending.

Individuals wanting more information about the M&I investigation can email info@stemberfeinstein.com.

Despite Recession Talks, Many Advisers Still Bullish on U.S. Economy

Despite all the talk about the declining U.S. economy, a recent survey of financial advisers found that 63% of financial advisers are bearish over predictions for U.S. economic growth.

Further, 42% expect a decrease in gross domestic product growth, and only 21% expect GDP to go negative, marking a recession.

The poll of 151 advisers by MoneyShow.com, a multimedia investment education destination for financial advisers, investors, and traders, found advisers are bullish on U.S. equities, with 62% reporting they believe the S&P 500 will rise from now until the end of the year, a decrease from 71% bullish near the markets’ peak last October. However, the survey found that the proportion of very bullish advisors—those who expect the S&P 500 to gain more than 10% by the end of the year—has jumped to 20%, from 12% in last October’s poll. More than double that number (42%) of advisers believes the S&P 500 will rise less than 10%.

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The asset class advisers expect to do the best between now and the end of the year was commodities (32% of advisers)—a significant increase over the 20% of advisers who predicted that class would be superior last fall. Large-cap U.S. stocks ranked second, selected by 26% of advisers. Foreign stocks, predicted to do the best by 36% of advisers last fall, only garnered 13% of the vote in the latest poll.

“That could mean that the bullish advisors have gotten even more bullish—or the big declines we’ve seen give stocks more room to advance,’ wrote Howard R. Gold, executive editor of MoneyShow.com, on the Web site. “But in a market like the one we’ve been through, we’ll take our silver linings anywhere we can find them.’

The majority of financial advisers, 65%, expect inflation to increase and 54% believe the Federal Reserve will lower short-term interest rates over the remainder of the year. However, 38% anticipate that rates will remain where they are, and a scant 8% expect rates to rise.

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