Edelman Financial Engines has filed a lawsuit against Mariner Wealth Advisors, accusing the company of using aggressive recruitment tactics to lure away Edelman’s clients and financial planners, resulting in a loss of business.
In the lawsuit, filed in the U.S. District Court for the District of Kansas, Edelman alleges that Mariner has unlawfully obtained and used the company’s trade secrets, interfered with its operations, and damaged its reputation. Seeking damages, an injunction, and other relief, Edelman is determined to put an end to these deceptive practices.
A spokesperson for Edelman stated, “The complaint we filed today provides a detailed account of the deceptive actions Mariner has taken to misappropriate our confidential information, deceive our employees, and take away our clients and their assets. We are taking legal action to protect our investments in our business.”
Mariner Wealth Advisors declined to comment on the lawsuit.
This legal battle pits two prominent wealth management firms against each other. As of June 30, Mariner and its affiliates advise on over $114 billion in assets, while Edelman manages more than $245 billion in assets. These firms have been actively acquiring smaller registered investment advisory firms, further expanding their AUM, workforce, and presence. Notably, both Edelman and Mariner rank among the top five firms in ‘s Top 100 RIA Firms for 2023, with Edelman claiming the first spot and Mariner landing at number four. These rankings consider assets, revenue, and other indicators of practice excellence.
Edelman Financial Planners Accuse Mariner of Recruiting and Disclosing Proprietary Client Information
Introduction
The Boston-based firm Edelman has filed a lawsuit against Mariner, accusing the Overland Park-based company of actively recruiting high-performing Edelman financial planners and encouraging them to reveal confidential client data. According to the lawsuit, Mariner has successfully hired 10 financial planners from Edelman over the past two years. However, the impact goes beyond just losing talented staff for Edelman, as more than 850 of their clients, with a total asset value of over $620 million, have also switched to Mariner.
The Competitive Landscape
Competition in the wealth management industry is fierce, with national brokerage firms frequently poaching top financial advisors from one another. However, Edelman claims that their business model stands out from other firms in the industry due to its unique approach. Unlike other wealth management companies, Edelman provides its financial planners with leads on potential clients, allowing them to focus solely on building relationships and providing financial advice. To support this, Edelman invests significant resources in advertising and marketing efforts, generating referrals and establishing brand recognition.
Valuable Trade Secrets
Edelman alleges that certain information related to their clients and the financial planning process constitutes their most invaluable trade secrets. This includes data on current and prospective clients, their investment capabilities, investment histories, position in client portfolios, as well as actual fees charged and paid to planners and referral sources. These trade secrets give Edelman a competitive edge in the industry. By allegedly incentivizing Edelman’s financial planners to disclose this proprietary information, Mariner is accused of attempting to gain an unfair advantage.
In conclusion, Edelman’s legal action against Mariner highlights the aggressive nature of talent acquisition in the wealth management industry. It also brings to light the importance of safeguarding sensitive client information and maintaining a competitive edge amid increasing competition.
Edelman’s Lawsuit Against Mariner Financial Group
Edelman, a leading financial planning firm, has recently filed a lawsuit against the Mariner Financial Group, accusing them of poaching their employees and divulging confidential client information. The lawsuit claims that Mariner has been actively hiring Edelman’s financial planners, incentivizing them to compile lists of Edelman clients and sharing this sensitive data with Mariner.
According to Edelman, these lists contained highly classified information, including customers’ assets and investment potentials. The departure of these planners from Edelman occurred between July 10, 2021, and November 1, 2023, with the majority happening this year.
Furthermore, Edelman alleges that Mariner is still luring its employees away and making defamatory statements about Edelman. Mariner representatives have reportedly coerced Edelman employees into accepting positions at their company by claiming that everyone at Edelman is leaving. Shockingly, one representative even boasted, “We’re running Edelman Financial Engines out of business.”
To protect its valuable trade secrets and proprietary information, Edelman requires its financial planners to sign both non-solicitation and employment agreements. These agreements ensure that the confidentiality of Edelman’s data is maintained.
The lawsuit seeks to put an end to Mariner’s actions and hold them accountable for their alleged misconduct. Edelman believes that Mariner’s behavior is detrimental to their business and reputation in the financial industry.
It will be interesting to see how this legal battle unfolds and what impact it will have on both Edelman and Mariner. For now, the fight continues in court as Edelman strives to secure justice for what they perceive as unfair practices by Mariner.
Stay tuned for updates on this developing story.
