Search the News Archive

Fidelity Unit Warns of 'Massive Outages Across Major Fidelity Platforms,' in New Lawsuit

"Fidelity Technology Group is suing and seeking an injunction against the Palo Alto software maker in a festering contract dispute to prevent dire outcome that would stop most RIA client servicing in its tracks.... Broadcom Inc., a key Fidelity Investments software provider, is threatening to pull the plug on Fidelity's computers two months from now, creating a massive blackout for RIAs, clients and the company itself." [Fidelity Technology Group, LLC v. Broadcom Inc., No. 2584CV03035 (Mass. Sup. Ct. complaint filed Nov. 3, 2025)]

Fidelity, Centene Face ERISA Suit Alleging Excessive Fees, Misused Forfeitures

"According to the complaint, Fidelity's recordkeeping services to the ... plan created a conflict of interest because its affiliate, Fidelity Management Trust Co., served as trustee of the plan's assets, while Fidelity's separate affiliate, Strategic Advisors, served as investment advisers to the plan. The complaint alleges that Fidelity charged participants between $39 and $50 in annual administrative costs for the 2019 through 2023 plan years ... [while] comparable plans using Fidelity had costs of about $3 to $31 per participant[.]" [Clark v. Centene Corp., No. 25-09743 (C.D. Calif. complaint filed Nov. 12, 2025)]

Fidelity Settles Lawsuit with Own Employees Over 401(k) ERISA Allegations

"[The] settlement agreement provides for $12 million to be paid to the class and for .. affirmative relief [including]: [1] The Plan will make available a wide selection of both Fidelity and non-Fidelity mutual funds.... [2] Fidelity is increasing auto-enrollment for eligible employees from 3% to 7% of eligible compensation, and will default current participants who are currently deferring below 7% to 7% of eligible compensation. Fidelity will apply its match to those increased contributions. [3] The Plan shall provide that revenue sharing attributable to non-Fidelity mutual funds shall be credited to participants in the same way as revenue attributable to Fidelity mutual funds and collective trusts pursuant to the 8th amendment to the 2005 restatement of the Plan is credited to participants."

Fidelity Files Motion to Dismiss Lawsuit Over In-House Plan

"Fidelity makes the following non-exhaustive list of legal and factual arguments: [1] Plaintiff lacks constitutional standing to bring her claims because she was only invested in a small sub-set of a much larger group of Fidelity funds in the plan.... [2] Fidelity offered free advice to all participants to help them pick from the plan's lineup. [3] Between 2007 and 2011, Fidelity contributed $2.1 billion in employer contributions, which purportedly amounts to 10 times the alleged amount of excessive fees paid back to Fidelity from the plan's investments. [4] Prohibited Transaction Exemption 77-3 expressly allows a company like Fidelity to use its own mutual funds."

Schwab Joins Fidelity in Credential-Sharing Crackdown

"Schwab has asked clients to reset their login credentials, a request coming shortly after Fidelity took similar action to limit third-party vendor access to 401(k) and other customer accounts. Like Fidelity, Schwab has cited protecting client data in their attempts to limit credential sharing of a client's username and password. Third party fintech firms such as Pontera have adopted credential-sharing technology to connect selected outside advisors with held-away assets such as 401(k) accounts from retirement plan providers."

Fidelity, Pontera Clash Over 401(k) Access and Data Security

"The use of actual customer credentials to access accounts is a clear sticking point for Fidelity, because those credentials provide access to a user's full account experience -- not just their 401(k). Plan participant credentials held by third parties are not protected by a recordkeeper's security measures, which can put participant data and personal information at risk."

Pontera CEO Heats Up Year-Long Battle Over Fidelity Ban on Credential Sharing

"Pontera CEO Yoav Zurel ratcheted up his year-long battle with Fidelity Investiments, scolding the No. 1 401(k) recordkeeper in an 'open letter' for refusing to allow third-party credential sharing.... Pontera's business model depends on password sharing to link RIAs and their Fidelity 401(k) clients through a 'holistic portfolio' on its platform. "

Fidelity Increases Data Security by Limiting Credential Sharing

"Some third-party fintech firms use credential sharing to access, manage, and trade within their clients' employer-sponsored retirement accounts ... without plan sponsor oversight. Credential sharing presents security risks to our customers ... Fidelity ... will begin taking steps to prevent platforms reliant on credential sharing from accessing and taking action in customer accounts held at Fidelity. This change is with customers' best interests in mind to enhance security and reduce customer data exposure."

Senators Urge Fidelity to Discontinue Bitcoin 401(k)s

"Senators Richard (Dick) Durbin, Elizabeth Warren, and Tina Smith sent a letter to Fidelity on Monday, November 21st, urging Fidelity to reconsider its exposure to cryptocurrencies. Their primary concern is with Fidelity's inclusion of Bitcoin into some of its 401(k) pension plans."

Appeals Court Affirms Dismissal of Fidelity 'Infrastructure Fee' Lawsuit

"Fidelity describes the fee as compensation for the costs of maintaining the platform. But the plaintiffs alleged the fee is a 'pay-to-play' charge for access to Fidelity's retirement plan investors that violates Fidelity's ERISA fiduciary duties.... The appellate court, like the lower court, rejected all of the plaintiffs' theories for fiduciary status[.]" [In re Fidelity ERISA Fee Litigation, Wong v. FMR LLC, No. 20-1286 (1st Cir. Mar. 5, 2021)]

New Fidelity Fee Decision Addresses Several Important Issues for Plan Fiduciaries

"[T]he court's 67-page opinion addresses ... a plan fiduciary's obligations with respect to self-directed brokerage accounts and the consideration of collective investment trusts and separate accounts as alternatives to mutual funds. The court also ruled that relief may be available against Fidelity even if Fidelity's breach caused no harm to the Plan and did not result in any profit to Fidelity." [Moitoso v. FMR LLC, No. 18-12122 (D. Mass. Mar. 27, 2020)]

Fidelity Beats Back ERISA Challenge: Infrastructure Fee Complaint Dismissed

"The plaintiffs argued that Fidelity was a fiduciary because its decisions over the past several years to charge -- and increase -- the infrastructure fees showed that Fidelity had discretion over its own compensation. The court rejected this theory on the grounds that Fidelity negotiated the fees with the mutual funds and that the funds were not required to pass the fees on to the plans or participants." [In re Fidelity ERISA Fee Litigation, No. 19-10335 (D. Mass. Feb. 14, 2020)]

Fidelity Wins Dismissal of ERISA Lawsuit Over 'Infrastructure Fees'

"Fidelity has won a dismissal of a class action brought by 401(k) plan participants over 'infrastructure fees' charged to third-party mutual funds on the company's investment platform. The plaintiffs alleged the company's imposition of the fees violates ERISA's fiduciary-duty rules. But the court dismissed all claims after finding Fidelity didn't act in a fiduciary capacity when setting the fees." [In re Fidelity ERISA Fee Litigation, No. 19-10335 (D. Mass. Feb. 14, 2020)]

District Court Rules in Favor of Fidelity in Revenue Sharing Fee Litigation

"[The court] granted Fidelity's motion to dismiss in litigation brought by 401(k) plan participants alleging that Fidelity breached its fiduciary duty to their respective plans and engaged in prohibited transactions under ERISA by charging mutual funds 'infrastructure fees' for access to Fidelity's FundsNetwork investment platform, which then passed those costs to the plans[.]" [In re Fidelity ERISA Fee Litigation, No. 19-10335 (D. Mass. Feb. 14, 2020)]

Fidelity at Center of New Strategy for ERISA Breach Lawsuits

"The litigation argues that Fidelity violated ERISA through offering competitors' mutual funds to Fidelity clients. The lawsuits by current and former DC plan participants focus on the adequacy of fee disclosure and whether record keepers are considered defined contribution fiduciaries. Plaintiffs alleged that Fidelity is a fiduciary and is charging 'secret' fees; Fidelity responded that it discloses the fees and that it isn't a fiduciary."

Fidelity Says It's Entitled to Alleged 'Secret Payments' in 401(k) Plans

"Fidelity ... [asked] a federal court to dismiss a lawsuit alleging the fees caused the Boston-based firm to profit at the expense of customers' retirement savings and breached its fiduciary duty.... [T]he fee is nothing more than an 'arm's length' payment negotiated with certain money managers, and such compensation negotiations don't mean Fidelity is acting as a fiduciary, the firm said. Fidelity negotiated its 'infrastructure fees' with asset managers on the FundsNetwork platform in 2017." [Wong v. FMR LLC, No. 19-10335 (D. Mass. defendant's memo in support of motion to dismiss filed Jul. 1, 2019)]

Fidelity Faces Massachusetts State Inquiry Over Fees Charged for 401(k) Plans

"Fidelity Investments is facing more scrutiny over fees it charges some mutual funds for using its platform to access retirement plan customers. The Massachusetts ... securities division sent a letter on Feb. 27 to Boston-based Fidelity requesting information about those fees. The inquiry follows a Feb. 21 lawsuit against Fidelity by an investor in T-Mobile USA's 401(k) plan that claims the firm conceals so-called infrastructure fees."

Fidelity Backs Away from Being 'Point in Time' Fiduciary for 401(k) Plans

"Fidelity Investments no longer will serve as a fiduciary when it helps employers select investments for their 401(k) plans, moving away from a policy the firm adopted last year in response to the [DOL's] fiduciary rule.... Fidelity was the only record keeper that said it would adapt by providing services as a fiduciary under the new regime ... However, given the DOL rule's fate, the level of investment guidance is again considered non-fiduciary under ERISA, and Fidelity has distanced itself from the 'fiduciary' label as a result."

Fidelity Puts 6 Million Savers on Risky Path to Retirement

"While deposits in the trillion-dollar sector have surged, Fidelity has seen nearly $16 billion in net withdrawals over the past four years ... The exodus stems in part from unease with the way Boston-based Fidelity has boosted performance -- by ramping up risk.... Fidelity portfolio managers now try to time market shifts, for instance by moving billions of dollars out of money-losing commodities bets and into Chinese stocks and U.S. tech shares[.]"

Fidelity Prevails in Suit Over Investment Costs, Robo-Adviser Fees

"Fidelity Management Trust Co. and a subsidiary defeated a lawsuit by participants in Delta Air Lines Inc.'s retirement plan challenging alleged high-cost investment options and certain financial advisory fees. The participants failed to show that Fidelity exercised a fiduciary function over which share classes would be available to them through the brokerage account that would give rise to liability under [ERISA] ... The plan documents show that once Delta chose to include a brokerage account, Fidelity was bound to follow the participants' investment instructions and exercised no discretion or authority with respect to which shares they elected to buy[.]" [Fleming v. Fidelity Management Trust Co., No. 16-10918 (D. Mass. Sept. 22, 2017)]