There's trouble brewing in tranquil Minneapolis, MN, at Ameriprise Financial Inc., "America’s leader in financial planning."  A group of employees has sued the firm over its 'poor financial planning' in their 401(k) plan.  Apparently, the firm offers only Ameriprise funds in the 401(k) plan - funds that were much more expensive than those offered by other fund managers. Employers that offer 401(k) plans serve as fiduciaries, which requires them to put their employees’ interests first when deciding which funds will be included as investment alternatives:

"While workers can’t do much when a stock market sell-off hits their 401(k) balances, they can speak up about poor investment choices and unreasonable plan fees.  Now, more are taking those complaints to the courts as they bring lawsuits against employers they believe have allowed poorly-performing and overly-expensive funds into their retirement plans."

The suit, filed on behalf of several employees and is seeking class action status, alleges that Ameriprise pushed workers into expensive and untested proprietary funds at a cost the lawyers for the employees say is more than $20 million. 401(k) Plan Litigation - A Growing Trend. In recent years, there have been about 3 dozen lawsuits filed over 401(k) costs.  Experts don’t expect those cases - or high 401(k) fees - likely to disappear anytime soon, even though a rule scheduled to kick in by mid-2012 should give workers much more insight into the fees built into their plans. Donald E. Froude, president of the Ameriprise's Personal Advisors Group, defended his firm on Monday, while speaking at the Reuters Global Wealth Management Summit.  "We feel we’ve acted appropriately," he said, adding, "This law firm has done several other cases." For further details, go to:   [InvestmentWatch, 10/12/11].