The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:An Excessive-Fee Case Against the Hartford Moves Forward Not Rated 5.0 Email Routing List Email & Route  Print Print
Thursday, December 20, 2012

An Excessive-Fee Case Against the Hartford Moves Forward

News summary by MFWire's editors

The Hartford [profile] isn't free of an excessive-fee suit just yet.

A lawsuit filed last year alleging that Hartford Investment Financial Services (HIFSCO) charged excessive management and distribution fees on six mutual funds has been partially dismissed by a U.S. District Court. Judge Renee Marie Bumb threw out the portion of the lawsuit claiming that the funds' 12b-1 fees are unreasonable, but is permitting the portion of the suit dealing with investment management fees to proceed.

The 83-page complaint, Kasilag et al. vs. Hartford Investment Financial Services, was brought in February 2011 by five plaintiffs who were invested in six Hartford funds through an employee-sponsored Simple IRA program. The suit alleges that excessive management and 12b-1 fees have diminished the plaintiffs' retirement savings by "staggering" amounts. The plaintiffs are asking to recover the total amount they paid in management fees.

The complaint argues that the management fees that the Hartford charges on its subadvised funds are excessive, because they are collected in addition to the fees paid to the subadvisors -- the firm, the suit contends, "collects a 'management fee' itself for performing little, if any, work." The complaint alleges that in 2010, HIFSCO earned over $157 million in investment management fees on the six funds, while paying $57 million in subadvisory fees.

And the suit takes issue with the funds' 12b-1 fees, which, it claims, "are are not tied to any distribution activities and no economies of scale are created or passed on to the Funds." The complaint notes that one fund's Class B shares charge 12b-1 fees despite having closed to new investment years earlier.

Judge Bumb ruled that while the plaintiffs have a reasonable cause to question the management fees, the record is "factually barren with regard to standing" on the matter of the 12b-1 fees.

The six funds named in the complaint are:
  • Hartford Growth Opportunities
  • Hartford Advisers Fund
  • Hartford Inflation Plus Fund
  • Hartford Conservative Allocation Fund
  • Hartford Global Health Fund
  • Hartford Money Market Fund 

    Edited by: Chris Cumming

    Stay ahead of the news ... Sign up for our email alerts now

  • 5.0
     Do You Recommend This Story?

    GO TO: MFWire
    Return to Top
     News Archives
    2024: Q2Q1
    2023: Q4Q3Q2Q1
    2022: Q4Q3Q2Q1
    2021: Q4Q3Q2Q1
    2020: Q4Q3Q2Q1
    2019: Q4Q3Q2Q1
    2018: Q4Q3Q2Q1
    2017: Q4Q3Q2Q1
    2016: Q4Q3Q2Q1
    2015: Q4Q3Q2Q1
    2014: Q4Q3Q2Q1
    2013: Q4Q3Q2Q1
    2012: Q4Q3Q2Q1
    2011: Q4Q3Q2Q1
    2010: Q4Q3Q2Q1
    2009: Q4Q3Q2Q1
    2008: Q4Q3Q2Q1
    2007: Q4Q3Q2Q1
    2006: Q4Q3Q2Q1
    2005: Q4Q3Q2Q1
    2004: Q4Q3Q2Q1
    2003: Q4Q3Q2Q1
    2002: Q4Q3Q2Q1
     Subscribe via RSS:
    Raw XML
    Add to My Yahoo!
    follow us in feedly

    ©All rights reserved to InvestmentWires, Inc. 1997-2024
    14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
    Privacy Policy :: Terms of Use