Investment Advice to Plans and Participants and Litigation Risks

In NAPA Net the Magazine, the official magazine of the National Association of Plan Advisors, benefits and executive compensation partners Fred Reish and Megan Hladilek and associate Emily Kile-Maxwell co-authored the article, “Investment Advice to Plans and Participants and Litigation Risks.”

The article discusses the uptick in ERISA claims filed against retirement plan advisers and the courts’ conclusions in such cases. The authors note cases against plan-level advisers, such as Lauderdale v. NFP Retirement, Inc. as well as cases against participant-level advisers, calling out Gosse v. Dover Corporation.

Reish, Hladilek and Kile-Maxwell encourage advisers to “protect themselves against these kinds of claims by documenting the processes behind their investment advice, understanding and following a plan’s investment policy statement (including recommending changes to the IPS where appropriate), adequately communicating with participants about the nature and scope of their services, and ensuring that participants understand and better appreciate the value they are receiving.”