Janus, the latest proprietary fund lawsuit

If you own a restaurant, it’s a bad look if the employees order takeout.

If you own a mutual fund company, it’s a bad look if you have other fund companies’ funds in your 401(k) plan.

The problem as a fiduciary of a very large 401(k) plan with proprietary funds in it, you’re going to be a target for a lawsuit. Welcome, Janus Henderson to the group of mutual fund companies that were sued for having their own funds in their plan.

The lawsuit claims that “given the excessive fees charged by the Janus Henderson Funds, and the availability of comparable or superior funds with significantly lower expenses, the compensation paid to Janus Henderson and its affiliates for their services was unreasonably high.”

The lawsuit noted that in 2018, “the most recent year for which average fee data is available, the Janus Henderson Funds’ fees exceeded the average expense ratio for funds within the same asset class category among plans with $250 million to $500 million in assets by an average of 62%.”

Whether there will be a settlement or not, these types of cases are the cost of doing business as a mutual fund company and the. need to keep up appearances.

Story Page
%d bloggers like this: