Ameriprise Monetary and LPL Monetary are partaking in an “financial struggle” over advisors leaving Ameriprise for the unbiased dealer/supplier, in response to latest authorized filings.
In separate lawsuits in Washington and California, the 2 corporations are battling over advisors fleeing Ameriprise for LPL, allegedly breaching their contracts, violating the Protocol for Dealer Recruiting and taking with them confidential consumer data.
This week, Douglas Kenoyer, a former Ameriprise advisor who left for LPL final month, responded to a lawsuit filed in opposition to him by Ameriprise as being made “with none regard to the reality.”
“Merely put, Ameriprise is submitting baseless circumstances as a device of company warfare,” the Kenoyer response learn. “Particular person advisors like Kenoyer (and their shoppers, if the movement is granted) are caught within the crossfire.”
He referred to as the lawsuit the “newest salvo in an financial struggle” Ameriprise is waging in opposition to LPL and former Ameriprise advisors within the courts.
The lawsuit Amerprise filed in Washington federal court docket on Oct. 14 alleged LPL helped Kenoyer breach his contract together with his employer when he left to hitch the IBD final month. On the time he resigned, Kenoyer, an unbiased franchise advisor in Spokane, Wash., serviced 583 shoppers with greater than $144 million in managed belongings, most of which he acquired from a departed Ameriprise advisor.
Ameriprise argued he started illegally soliciting shoppers months earlier than he modified corporations. Ameriprise accused Kenoyer of taking confidential consumer data when he left and argued that LPL knew (or ought to have identified) about this alleged deception.
Based on Kenoyer, the lawsuit is the fifth case or arbitration Ameriprise has filed within the final six months in opposition to advisors who left for LPL.
LPL additionally responded to the lawsuit, arguing the corporate supplied no proof that LPL illegally aided its new rent in taking consumer data from Ameriprise. As a substitute, LPL alleged that Ameriprise’s “true aim” was to cease LPL from soliciting any workers in any respect.
“For years, advisors have left Ameriprise for a lot of causes, together with that LPL presents a superior alternative for them to serve their prospects,” the LPL response learn. “Pissed off by its failure to compete out there, Ameriprise has turn into more and more determined to stamp out competitors from LPL and is abusing the courts in an try to satisfy its ends.”
An Ameriprise spokesperson instructed WealthManagement.com that Kenoyer had “misappropriated delicate consumer knowledge and stole commerce secrets and techniques” and stated the agency was trying ahead to presenting its proof in court docket.
“Time and time once more, LPL struggles to recruit advisors by the phrases of the Protocol for Dealer Recruiting, placing advisors and shoppers in danger,” the spokesperson stated.
LPL additionally responded this week to a separate lawsuit filed in California federal court docket by Ameriprise, stating the corporate’s criticism is “a public relations stunt masquerading as a lawsuit.”
In that case, Ameriprise claims LPL is engaged in “widespread” misuse of confidential consumer data when recruiting advisors, resulting in “unfair competitors” within the trade. Within the swimsuit, Ameriprise claimed LPL directed recruits from Ameriprise to take consumer data once they left. In an announcement on the time, an Ameriprise spokesperson stated LPL’s conduct was “unacceptable and abandons all cheap notions of consumer privateness rights.”
“It additionally topics the advisors it recruits to regulatory, and in some circumstances, even legal publicity by encouraging one of these conduct,” Ameriprise spokesperson Ali Mueller stated on the time.
However in a response filed this week, LPL acknowledged, “Advisors’ choice for LPL is no surprise: whereas LPL champions the independence of its advisors, Ameriprise provides it solely lip service.”
Each LPL and Ameriprise are signatories of the Protocol for Dealer Recruiting, established within the early 2000s to stem an increase in intra-broker/supplier lawsuits over departing advisors soliciting former shoppers after becoming a member of their new corporations.
Based on LPL, the IBD had thought of all its Ameriprise advisor hires as occurring beneath the strictures of the Protocol since 2022, “it doesn’t matter what an advisor might imagine their contract entitles them to retain when leaving Ameriprise,” and stated its advisors who moved between the corporations declared beneath penalty of perjury they adopted the Protocol when leaving Ameriprise.
LPL additionally accused Ameriprise of a “exceptional hypocrisy,” arguing the agency touted its “unbiased advisors” to entice reps into its indie channel.
“The unbiased mannequin rests on the foundational premise that the client relationship belongs to the advisor, not the agency,” the LPL response learn. “But on this lawsuit, Ameriprise refers to those prospects as ‘Ameriprise prospects’ and asserts that departing advisors don’t have any proper to retain their knowledge, even when the advisors introduced the shoppers to Ameriprise.”
Each lawsuits are ongoing. LPL declined to touch upon the California swimsuit, whereas a spokesperson for Ameriprise argued the case in opposition to LPL was “clear, compelling and regarding” and that there’d been a widespread sample of LPL encouraging and deceptive advisors to violate the Protocol and different rules.
“LPL is reckless and placing shoppers in danger by instructing the brand new advisors it recruits to add spreadsheets with confidential consumer data into LPL’s programs—together with, however not restricted to, Social Safety numbers, date of start, internet price and detailed account data, to poach shoppers with out prior data or consent,” the Ameriprise spokesperson stated.
