Cetera Advisor Networks, no stranger to adversity, is now a defendant in a lawsuit alleging a breach of duties.
The plaintiff, Enrique Bernaola, claims in the suit that the fees charged by his company’s 401(k) plan are “grossly excessive” and the investment options currently available are “imprudent.”
The retirement plan offered by his employer, Checksmart Financial, which was also named in the suit, had more than $25 million in assets and over 1,700 participants as of April, according to the filing. Checksmart is a financial services company that provides cash advances, check cashing, and money transfers. Cetera is a co-fiduciary and provides investment advice to the plan’s administrator, the suit notes.
Cetera did not comment on the lawsuit. “As a matter of policy, we do not publicly discuss legal or regulatory matters,” says a company spokesman.
Cetera’s parent company, Aretec, formerly known as RCS Capital, emerged from bankruptcy earlier this year and things seemed to be turning around. The firm added Edmond Walters, the highly regarded founder of eMoneyAdvisor, to the board this summer, providing fresh leadership for the approximately 9,000 advisers in its workforce.
Most recently, Cetera Advisor Networks announced an addition to its network, Minnesota-based Cornerstone Advisors. The practice holds approximately $150 million in assets and is led by James Benson II, according to the company. Cornerstone says it will be utilizing Cetera’s AdvisorNet for “back- and middle-office services,” as well as some supplemental fee-based services.
Despite the challenges facing the company, Benson says he is “privileged” to be working with Cetera, noting in a press release that the additional resources will allow him to spend more time focused on clients and business growth and less time on compliance and administrative task.
Benson was not available for additional comment.