Moreover, the firm's "proprietary funds
were the exclusive actively managed investment strategies available on the plan." The lawsuit claimed that 80% of the plan's $434,848,484 in assets under management (AUM) were invested in Eaton Vance funds.
Through both proprietary funds
and the funds it manages, Everbright has invested in companies both in China and globally, including China UMS, Goldwind, CECEP Wind-power Corporation, HC SemiTek, BGI, Betta Pharmaceuticals Co.
Franklin Resources will pay $13,850,000 and make other provisions to settle a lawsuit alleging that defendants breached their Employee Retirement Income Security Act (ERISA) fiduciary duties by causing Franklin Templeton's 401(k) plan to invest in proprietary funds
when better-performing and lower-cost funds were available.
While these subjects often warrant the focus of whole textbooks, Bland provides an excellent overview in a single chapter, covering the basics of governmental funds, proprietary funds
, and fiduciary funds.
This awareness has touched off a flood of lawsuits, charging the use of "expensive proprietary funds
," "expensive, poor performing investments" or "excessive recordkeeping fees," against the pension plans of some of the largest institutions in the country, including Wells Fargo, Fidelity, Neuberger Berman, Starwood Hotels, Verizon, Chevron, Intel, Oracle, American Airlines, Deutsche Bank, Putnam Investments and Allianz, as well as MIT, NYU and Yale University.
In addition, as part of their efforts to educate and empower investors, Tony and Creative Planning have launched Second Opinion, a program that analyzes a client or prospect's financial statements to uncover potential red flags in their existing portfolios such as proprietary funds
, high-commission products, underperforming funds, and more.
* Proprietary funds
. Sixty-seven percent of plans include investment options proprietary to the plan's record keeper in their investment menu; these proprietary investments hold 25% of total plan assets.
Fund families involved in plan design work with plan sponsors to create menus that serve the interests of plan participants, but they also have an incentive to promote their own proprietary funds
when more suitable options may be available from other fund families.
"In addition, if HNW assets continue to flow to autonomous providers, including RIAs and family offices, opportunities increase exponentially since these firms truly rely on open architecture, without the common obstacle of proprietary funds
presented by many legacy providers.
The illustrated statement combined all governmental and proprietary funds
and reported on the entity as a whole, with no separate fund reporting.
Companies generally offered fewer than 10 proprietary funds
covering basic asset classes such as large-cap growth and value, bonds and money market funds.