Stifel Financial faces a proposed class-action lawsuit filed Friday alleging it mismanaged its profit-sharing 401(k) retirement plan.
The complaint contends Stifel failed to remove two funds — the American Century Large Cap Growth Fund and the Artisan Mid-Cap Growth Pooled Account — from the plan even after they performed poorly for over a decade, according to a statement from the plaintiffs' firm, Sanford Heisler Sharp McKnight.
Combined, the two funds' poor investment performance has cost the plan and its participants from $42 million to $134 million in retirement savings since March 1, 2020, the complaint alleges.
Filed in U.S. District Court for Missouri's Eastern District, the lawsuit by named plaintiff Amber Striplin seeks to hold Stifel, its board and the plan's investment committee responsible for keeping the funds in the plan.
It alleges the American Century fund significantly lagged its benchmark and comparable funds for the past six years and that since its inception in 2001, it has underperformed the Russell 1000 Growth Index by about 1.41% per year. Since the Artisan fund was introduced to the plan in 2014, it has underperformed its benchmark and comparable funds, and over nearly 26 years, it has under-performed the Russell Mid-Cap Growth index by about 1.5% annualized, the suit says.
Stifel should have removed both funds from the plan years ago but instead maintained them there, costing Stifel employees and retirees millions of dollars in retirement savings, breaching the firm and other fiduciaries' duties of prudence under the Employee Retirement Income Security Act, according to the lawsuit.
Plan participants have invested nearly $160 million in the American Century fund, and over $73 million in the the Artisan fund, according to the suit. Roughly 10,000 Stifel employees, retirees and their beneficiaries participate in the plan, which has over $2 billion in assets, the suit says.
"Annual underperformance of this magnitude ... can torpedo a participant's retirement savings by costing them hundreds of thousands of dollars in lost returns over their careers," Charles Field, who represents the plaintiff, said.
Stifel had no comment on the complaint.
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