The Securities and Exchange Commission takes issue with revenue sharing tied to a preferred broker’s “transaction fee” program, underscoring how fee-based advisers are not immune from allegations of conflicts of interest.
Beyond the issue of excessive compensation, the lawsuit questions the collection of “float interest” and asks whether BTG International permitted a provider to create a “captive market for 401(k) rollovers.”
In the majority of cases, plan sponsors that participated in Callan’s 2019 Defined Contribution (DC) Trends Survey said their plan consultant/adviser conducted fee benchmarking, and in 2019, sponsors will be looking to switch to lower-fee share classes and to more institutional vehicles.
The court officially ended the case by approving a dismissal motion jointly filed by the parties.
Attorneys warn the “other shoe has dropped” in the SEC’s special Share Class Disclosure Initiative—and RIAs that did not self-report potential 12b-1 fee disclosure violations are now being investigated.
One case focused on excessive fees for recordkeeping, administrative, and investment services, and the other focused on revenue sharing.
The new lawsuit alleges the university engaged in prohibited transactions when it used revenue sharing from plan investments to pay for HR staff salaries and fringe benefits.
An announcement also notifies plan participants about revenue sharing paid to TIAA from some investment funds and says revenue sharing will be rebated to participants.
Despite Wells Fargo's admission and resolution of an error, the Chattanooga Fire & Police Pension Fund wants an accounting of all compensation the bank received while it was trustee of the fund.
In the majority of cases, the plan’s consultant/adviser conducts the benchmarking (82.8%)—higher than in prior years, Callan finds.