Fidelity Defends Fees, Rejects Fiduciary Label in 401(k) Suit

FMR LLC, the parent company of Fidelity Management, defended the infrastructure fees it collects from mutual fund companies in the face of a lawsuit claiming the fees amount to an illegal kickback scheme.

Providing a platform for distributing mutual funds and negotiating compensation from the fund companies isn’t fiduciary conduct that can give rise to liability under the Employee Retirement Income Security Act, Fidelity said in a reply.

The proposed class action accuses Fidelity of unilaterally increasing the money it makes from servicing 401(k) plans by “shaking down mutual fund companies” for more fees, which are then passed on to ...