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Is Nationwide on your side? Not everyone thinks so
Nationwide is "on your side" as the financial services giant's corporate slogan goes, but Lou Haddock doesn't think so. In a class action originally filed in the United States District Court in Connecticut 2001 Haddock, a trustee of a retirement plan advised by Nationwide, charges it with accepting "revenue sharing payments" from mutual funds as the cost of being included as investment options in its retirement plans. Haddock claims the receipt of these payments violates the Columbus, Ohio-based company's "fiduciary duty," which Haddock alleges is the duty to act solely in the best interest of the plan participants. In a previous blog post, I discussed similar claims against another insurance company, John Hancock.
Nationwide denied any wrongdoing and denied that it was a fiduciary to the plan. In a preliminary ruling issued Nov. 6, 2009, the Court found Nationwide "may be a fiduciary", but this really begs the issue: Whose side is Nationwide on when it selects investment options for 401(k) plans?