Thursday, December 14, 2006

Excessive Fee Suit Finds Fidelity

The WSJ reported today that Schlicter Bogard and Denton has filed suit #11 against Fidelity and 401(k)Plan sponsor Deere & Co for improper, undisclosed and excessive fees. According to the article, the suit alleges that 1/3 of the fees collected by Fidelity go to revenue sharing and that the nature of a flat revenue sharing fee structure disproportionately benefits service providers as individual asset balances grow. Another allegation is that the Plan had a long standing agreement to select only Fidelity products.

It will be interesting to review the details of this complaint since this is the first major excessive fee suit filed against a servive provider.


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