Ameriprise Agrees to 27.5 Million 401(k) Settlement!
Once you read this article, you should be motivated to read my book Bad Advisors: How to Identify Them; How to Avoid Them. To download this book for free go to www.roccy.org or simply e-mail me at firstname.lastname@example.org and I’ll e-mail you a copy in PDF.
Did you know that Ameriprise (a financial planning firm with over 7,500 financial representatives nationwide) was sued by its own employees?
Want to know why?
The employees sued Ameriprise for offering inferior investments in the company’s own 401(k) plan.
Guess what kind of investments were options in the employees’ 401(k) plan?
Ameriprise’s own mutual funds. Specifically alleged, the funds in question (Riversource Funds) were “expensive, underperforming, and charged employees excessive fees.”
This lawsuit is about as ironic as life gets. Think about it….Ameriprise touts itself as this great financial planning firm and their advisors give financial/retirement planning advice to tens of thousands of clients. But then its own employees sued Ameriprise because their own mutual funds are not very good.
What kind of mutual funds do you think Ameriprise advisors are recommending to their clients? Of course their Riversource Mutual Funds.
If Ameriprise’s own mutual funds are not good enough for their own employees (and they are not as this lawsuit/settlement indicates), then what makes these same mutual funds good enough for the clients of Ameriprise?
What are the chances that Ameriprise advisors are disclosing to clients that employees of Ameriprise sued because their own employer’s funds were inferior to others in the market? I’m guessing none!
What was the settlement?
“Ameriprise Financial (AMP) has agreed to pay $27.5 million to settle a class-action lawsuit that alleged it broke its fiduciary duty to about 24,000 current and former participants in its own retirement plan.”
The moral of this story is that if you trust your financial planner or insurance agent, you are taking a serious risk. The reason I wrote my book Bad Advisors is so readers could be armed with the knowledge so they no longer had to wonder if their advisors are any good. By reading my book, you will be able to determine with certainty if you have “good” or “bad” advisors.