You're watching...
The Online 401(k) CEO Chad Parks on the lawsuit against Fidelity for allegedly improperly using customer money earned in overnight accounts to pay its...
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Have all that and more coming up later in the show but first tonight our top story Fidelity.
You know them the largest manager of workplace retirement plans in the countries.
Facing accusations tonight.
That it in properly uses your money customer money to pay for operating expenses.
Three Massachusetts residents accusing the firm of temporarily investing.
Floating in -- is the income your money earns an overnight accounts for the company's own benefit.
-- it's true that's in violation of the employee retirement income securities act.
My next guest says the practice of hidden fees runs deep in retirement plans.
And participants are right to be angry and demand compensation joining me now Chad -- CEO of the on line 401K hey -- welcome back to the show.
Would you be surprised if this torture -- we don't know yet it's a lawsuit pending that's all.
But do you think this could be true.
I really do think can be true there are so many hands in these pockets.
The money in transit is this this particular case doesn't surprise me that.
We might see that this is in fact true.
The Department of Labor you mentioned it -- income retirement income security act Erisa has very clear guidelines about what.
An employer must do to get the money out of their hands and into the hands of the employees retirement trust -- the use the term as soon as practical.
Which means there should not be any delay in transferring the money from the corporation to the employees' accounts so if these if Fidelity's in fact.
Skimming off the top while this -- in transit that could be a big problem.
And let's be clear you're saying this is illegal if it's true it's a label correct REI.
Last year a federal judge ruled against Fidelity in another cut company.
Because they breached their fiduciary trust and not at Fidelity was behind over a million dollars for this.
This seems to need to be almost commonplace is this.
Just business as usual in the fund industry.
It it is to a certain degree you know 401K -- disclosure is something that we've talked about in the past here and that is something that is also.
Come to light last year -- to regulations the department later has put out.
Transparency of -- -- KP pricing is supposed to be making its way through the industry.
And there are really just so many layers of upon layers of different fees -- very difficult to know which -- You -- caught the fox in the hen house.
That do these fund companies and advisors just can't keep their hands off the money and they're always been taken a little bit of our money and putting -- their own pockets.
That's right you mention the word fiduciary.
My do you have quick example if we could I brought with me to 100 dollar bills.
-- yeah as a fiduciary.
If you are in charge of making sure that you making the right decisions one of these really easily worth ninety -- the other ones worth 100.
If you choose B 99 dollar value bill over the hundred you've broken your fiduciary responsibility.
-- lawsuit.
Are consistent with a lot fair to all parties in the we provide valuable services to 401K clients for whom Fidelity services as a record keeper and trustee says -- -- Eight now -- were in the wrong here.
Now we're doing it all right but of course.
Lots to discuss here Chad thanks for coming on the show tonight really appreciate your time thank you very much thank you.
