Deals & People September 14, 2023

OneDigital Makes 6th Acquisition This Year, Fueling Southeast Expansion

The aggregator added wealth manager Triad Financial to join its five previous wealth or retirement advisement acquisitions so far this year.

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OneDigital’s investment advisers division has made the aggregator’s sixth acquisition of the year, adding a Southeastern wealth manager with $900 million in client assets, the firm announced Tuesday.

OneDigital Investment Advisors acquired Greensboro, North Carolina-based wealth manager Triad Financial Advisors as it adds to benefit and advisory services in the Ssoutheast. The firm currently has more than 2,000 retirement plan clients from nine different teams across the Carolinas, Tennessee, Florida and Georgia, according to a spokesperson.

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The acquisition continues a push by the firm and other aggregators to add wealth management practices to retirement plan advisement, insurance and health benefits. The Overland Park, Kansas-based advisory division had already made retirement- or wealth-focused deals in 2023 with Stone Street Equity, Huntington National Bank’s retirement division, 401K Resources, (k)RPG LLC and Florida Pension Group.

Triad has been operating since 1982 with a focus on high-net-worth families and female investors, according to the announcement. The firm works in wealth management services, including retirement planning, investments, asset management, portfolio analysis and monitoring.

Patrick Rush, chief executive officer and owner of Triad, and members of his team will join OneDigital.

“Our values and vision align with OneDigital, and this partnership brings more opportunities to not only our clients as part of a broader company, but also more opportunities for our employees to expand their own career opportunities,” Rush said in a statement.

The move continues OneDigital’s strategy of growing its footprint across benefits including insurance, retirement planning, wealth management and health. The company currently has more than 75,000 employees and is headquartered in Atlanta.

Compliance September 14, 2023

American Airlines Asks Judge to Toss 401(k) ESG Complaint

The airline's motion maintains that former pilot has no standing in ESG investing lawsuit, including an amended complaint that sought to expand "the list of managers he targets." 

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American Airlines last week filed a motion to dismiss a lawsuit filed by plaintiff Bryan Spence, requesting the court dismiss with prejudice the amended complaint from the former American pilot who has continued to push for damages from the carrier and its benefits committee for allegedly defaulting him and other participants into underperforming funds that have a focus on environmental, social and governance investing.

American Airlines’ latest motion maintains that Spence does not have standing in Spence v. American Airlines Inc. et al., filed on June 1, in part becuase he was never invested in the funds in question.

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“Plaintiff’s Challenged Fund theory fails at the outset for lack of Article III standing,” the complaint states. “Plaintiff does not allege that he has invested any portion of his Pilots Plan account in the Challenged Funds he lists in the Amended Complaint. Nor could he, as he has never invested in any of the 25 Challenged Funds.”

In an amended complaint from Spence filed in August, the former pilot sought to refute similar arguments made by American Airlines in an earlier motion to dismiss, the docket shows. The amended complaint alleges the defendants improperly included in the plans’ investment lineup ESG-themed funds and that several of the plans’ funds that pursue only pecuniary objectives are run by managers who Spence claims have used their proxy voting power in favor of ESG-themed shareholder proposals.

It also asserts that 37% of Spence’s retirement savings were invested in BlackRock Inc.’s Target Date 2045 fund, which he alleges incorporates ESG factors when selecting investments.

Spence’s second theory underlying his claims—that the plan should not be using a broader list of challenged managers with allegedly sub-par proxy voting practices even to manage investment strategies that pursue purely pecuniary objectives—fails to state a claim, American Airlines’ attorneys argued.

“Plaintiff has patched over the standing problem with his Original Complaint—that he had not invested in any investment options managed by the Challenged Managers—by expanding the list of managers he targets to conveniently include ones involved with options he has personally chosen for his Pilots Plan account,” the motion states. “But he has done nothing to remedy a separate fatal flaw: Plaintiff does not allege any facts sufficient to infer that the unspecified options sponsored by the Challenged Managers are financially inferior to those available from other managers, and thus that a prudent fiduciary would not select them. He likewise alleges nothing that remotely permits an inference that Defendants selected the Challenged Managers in an effort to serve their own financial interests or otherwise engaged in acts of disloyalty.”

American Airlines’ attorneys also argue that Spence did not make a clear argument: “It should go without saying that to state a viable federal claim over the financial performance of the Plans’ investment options, he has to plead facts about the performance of those options. Plaintiff says not a single word, and thus fails to state a claim.”

The initial complaint was filed earlier this year in U.S. District Court for the Northern District of Texas, in the Fort Worth Division.

For the 2021 plan year, the American Airlines Inc. 401(k) Plan held $15 billion in retirement assets for 105,789 participants, and the American Airlines Inc. 401(k) Plan for Pilots held $11 billion in retirement assets for 16,488 participants, according to the latest Form 5500 data filed to the Department of Labor.

American Airlines representatives did not return a request for comment.

Hacker Stephens LLP and Sharp Law LLP represent Spence, while American Airlines is represented by Kelly Hart & Hallman LLP and O’Melveny & Myers LLP.  

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