Edward Jones failed its employees by picking overly-costly investments for the company’s 401(k) retirement savings plan, a new lawsuit alleges.
A spokesman for the Des Peres-based financial services company denied the allegations.
The proposed class-action suit, filed Aug. 19 in U.S. District Court in St. Louis, says Edward Jones picked mutual funds for the plan that pay money back to Edward Jones. That practice, called “revenue sharing,” rewards a brokerage for directing large amounts of money into certain mutual funds.
The suit also claims that Edward Jones used higher-expense versions of mutual funds when lower-expense funds were available. That cost employees $13 million, the suit alleges.
The suit is among a flood of litigation filed in recent years against companies, universities and other employers charging that they did a bad job in running 401(k) plans, and that the employees were charged too much for their investments.
Read more: St. Louis Post-Dispatch