Ameriprise Financial has petitioned a federal judge to dismiss portions of a lawsuit filed by investors alleging unfairly low interest rates on uninvested cash and to compel arbitration for other claims.
The case, brought in Minneapolis federal court, accuses Ameriprise of breaching fiduciary duties and contractual obligations, with the plaintiffs asserting they deserved higher interest rates than the company provided—at times as low as 0.01%, according to their November 4 amended complaint. The investors also seek class-action certification.
Ameriprise contends that the plaintiffs held both brokerage and investment advisory accounts, each operating under distinct regulatory standards and roles. In brokerage accounts, clients can make independent investment decisions or follow recommendations, while advisory accounts involve decision-making in collaboration with an advisor.
In a December 20 court filing, Ameriprise stated it fully discloses interest rates on uninvested cash and noted that brokerage account contracts explicitly inform clients that sweep account programs may offer lower rates than other financial products. The company argues that the plaintiffs are attempting to retroactively claim entitlement to higher rates not stipulated in their agreements.
“Plaintiffs cannot assert a contractual right to interest rates associated with alternative brokers or products when their contracts expressly disclaim such a right,” Ameriprise’s filing states.
Ameriprise also seeks dismissal of the breach of fiduciary duty claim, asserting that no fiduciary duty existed in the context of its brokerage services. The company highlights that brokerage relationships are governed by the SEC’s Regulation Best Interest rule, which mandates brokers act in clients’ best interests but does not grant investors the ability to sue firms in court.
For claims related to advisory accounts, Ameriprise argues they fall under mandatory arbitration clauses in client agreements. It has requested the court to compel arbitration or, failing that, dismiss these claims entirely.
An Ameriprise representative dismissed the lawsuit as baseless, emphasizing the firm’s intent to vigorously defend itself. The attorney for the investors—Susanne Mehlman, Joy Hultman, Mindy Bender, and Robert Sullivan—declined to comment.
This legal challenge is part of a broader trend. Nearly two dozen lawsuits targeting major brokerage firms, including Morgan Stanley, Charles Schwab, and LPL Financial, have been filed. These cases similarly allege breaches of fiduciary duty and seek class-action status and financial restitution.
