Two independent professional fiduciaries, Matthew D. Hutcheson and Brooks Hamilton, have filed an amici curiae, or friend of the court, brief in the Supreme Court of the United States in support of the petitioners in Dennis Hecker, et al., v. Deere & Company, et al. The Court is considering whether to hear the case.
Fiduciary360 (fi360), which provides training and other services to support fiduciaries, the Centre for Fiduciary Excellence (CEFEX), which evaluates and certifies firms’ fiduciary practices, and The Committee for the Fiduciary Standard, a group of industry leaders who have called on Congress ensure that the authentic fiduciary standard is part of any new legislation and regulation, supported the brief.
This case is sure to be watched closely by the financial services industry, which is enthralled in debate over whether all who deliver investment and financial advice to individual investors ought to be held to the same standard of fiduciary duty that investment advisors are held to, or the lesser, suitability standard, or something in between. The Senate and House draft versions of the Investor Protection Act both call for all who provide investment and financial advice to individual investors to be held to fiduciary duty, which is the “highest standard known to the law,” according to the brief.
Hutcheson told Wealth Manager via email that, “the bundled 401k providers KNOW that if they are held to that standard, they will no longer be able to share hidden revenue as they have in the past. That is the reason they have worked so hard to avoid fiduciary status. This could be a watershed moment for investors and plan participants.” Hutcheson is a member of The Committee for the Fiduciary Standard, as is this editor.
The case involves a class-action suit by Deere & Company 401(k) beneficiaries against the plan’s fiduciaries, alleging that they “breached their fiduciary duty to participants and beneficiaries,” by failing to “identify,” “understand,” and “act,” when revenue sharing in the account “exceeded a reasonable level.”