FOLLOW US

Stifel Financial Corp. breached its fiduciary obligations under federal law by failing to remove two chronically underperforming investment funds from its employee 401(k) plan, allowing participants to suffer tens to hundreds of millions in lost retirement savings, according to a proposed class action filed Friday in Missouri federal court.

Plaintiff Amber Striplin, a Stifel employee, claims the company violated the Employee Retirement Income Security Act (ERISA) by not monitoring or eliminating the American Century Large Cap Growth Pooled Account and Artisan Mid-Cap Growth Pooled Account — funds added to the plan in 2014 that have consistently lagged their benchmarks.

As of December 2024, Stifel’s retirement plan held $2.3 billion in assets for more than 10,000 current and former employees, beneficiaries, and their families. Approximately 7% ($160 million) was invested in the American Century fund and 3% ($73 million) in the Artisan fund, per the complaint.

Striplin alleges the American Century fund underperformed the Russell 1000 Growth Index by an average of 1.41% annually from 2001 through 2026, while the Artisan fund trailed the Russell Mid-Cap Growth Index by about 1% per year on average. Even modest annual shortfalls compound dramatically over decades, potentially costing participants hundreds of thousands in lost growth.

The suit estimates the funds’ poor performance has directly caused between $42 million and $134 million in losses to plan participants since March 1, 2020 alone. Striplin seeks to represent a class of all participants who invested in either fund from February 20, 2020, through resolution of the case.

“Instead of funding secure retirements for loyal workers, Stifel inexplicably wasted plan participants’ 401(k) assets on investments with lackluster performance,” Striplin stated in the complaint. “The Stifel defendants’ years-long mismanagement directly impacts thousands of rank-and-file employees who have collectively lost tens of millions of dollars they and their families counted on to go into their golden years.”

Charles Field of Sanford Heisler Sharp McKnight LLP, representing the proposed class, emphasized in a release: “Annual underperformance of this magnitude — 1% and more — can torpedo a participant’s retirement savings by costing them hundreds of thousands of dollars in lost returns over their careers. Cases like this are an important tool for protecting the hard-earned retirement savings of employees.”

Stifel Financial, headquartered in St. Louis, provides investment banking, securities, and financial services globally and employs about 9,000 workers.

Representatives for Striplin and Stifel did not immediately respond to requests for comment.

The complaint seeks damages, removal of the underperforming funds, full accounting of losses, and other equitable relief under ERISA.

This suit joins a growing wave of ERISA fiduciary breach challenges targeting large employers and plan sponsors over retention of high-fee or low-performing investment options — cases that often result in significant settlements and plan reforms to safeguard employee retirement security.