Boston-based Edelman Monetary Engines, an RIA with greater than $245 billion in shopper belongings beneath administration, is suing rival Mariner Wealth Advisors of Overland Park, Kan., for allegedly poaching advisors with greater than $621 million in shopper belongings and misappropriating commerce secrets and techniques.
The grievance was filed final Friday in U.S. District Courtroom in Kansas.
Mariner willfully stole “the fruits of Edelman’s multimillion greenback investments in advertising and shopper goodwill,” meaning to “run Edelman out of enterprise,” the lawsuit says. Edelman is in search of “damages and injunctive reduction” to forestall additional hurt to its enterprise.
“Corporations on the prime of their industries usually discover themselves the main focus of third events that favor to take unlawful shortcuts fairly than develop a enterprise by their very own innovation and natural efforts,” Edelman Monetary Engines (EFE) stated in a press release over the weekend. “The grievance we filed describes in nice element a protracted sample of misleading actions used to steal EFE’s confidential and proprietary enterprise data, mislead our workers, and misappropriate our shoppers and the belongings we handle for them. We’re taking this step to place a cease to those illegal practices.”
Mariner didn’t instantly reply to requests for remark.
Edelman, which offers monetary planning, funding administration and retirement revenue providers, was shaped in 2018 with the merger of Monetary Engines and Edelman Monetary Companies. Mariner, which manages some $66 billion in shopper belongings, opened in 2006. Edelman calls the corporate a “direct competitor.”
In courtroom paperwork, Edelman stated it has a singular enterprise mannequin in that it spends thousands and thousands of {dollars} on advertising to herald shoppers fairly than making its advisors generate their very own results in discover shoppers. That, partly, is why its shopper data is so important to its enterprise, it stated, and why shopper confidentiality is crucially vital.
“We plan to litigate this matter vigorously as a way to defend the numerous investments EFE makes to develop enterprise and supply our shoppers with the safety, privateness and superior funding advisory and monetary planning providers that they’ve come to count on from us,” Edelman stated.
In line with the grievance, Mariner aggressively poached monetary planners, incentivizing them to reveal proprietary shopper data that “Edelman has spent many years curating” in violation of their employment agreements. Edelman claims to have misplaced at the least 851 shoppers representing greater than $621 million in belongings beneath administration.
Mariner enticed Edelman professionals by saying Edelman is “a sinking ship” and “everyone seems to be leaping overboard.” It’s alleged to have printed equally “defamatory statements” about Edelman, the lawsuit says.
This “sample of illegal exercise” is constant to occur, the lawsuit says.
The lawsuit accuses Mariner of violating commerce secrets and techniques, conspiring to misappropriate commerce secrets and techniques, interfering with worker contracts, interfering with enterprise relations, participating in unfair competitors, and defamation.
Edelman requested the “full quantity” of compensatory and punitive damages “allowed by regulation,” along with legal professional charges and courtroom prices.
Edelman requested the courtroom to problem an order completely enjoining Mariner from persevering with to interact within the alleged misconduct.