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Regulation and Compliance > Litigation

Edelman Accuses Mariner Wealth of Poaching Scheme

By Melanie Waddell

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What You Need to Know

  • In a lawsuit, Edelman Financial Engines alleges Mariner is conducting an ongoing scheme to poach clients and steal trade secrets.
  • Mariner has lured 10 Edelman planners, accounting for at least 851 clients and over $621 million in AUM, according to the suit.

Edelman Financial Engines filed a lawsuit Friday against Mariner Wealth Advisors for what it calls an ongoing “unlawful scheme” to poach Edelman’s clients and steal its business and trade secrets.

In the suit, filed in the U.S. District Court for the District of Kansas, Edelman contends that to date, Mariner has persuaded 10 Edelman planners to move their assets under management to the firm.

Mariner, according to the suit, “continues to actively solicit more Edelman planners to join Mariner, including by engaging in pressure tactics and making patently false statements to the employees that Edelman’s business is failing, that it is a ‘sinking ship,’ that ‘everyone is leaving,’ and that they will be left without employment if they remain with Edelman much longer.”

Mariner, according to the suit, has “openly stated that its purpose is to ‘run Edelman out of business’ through these unlawful and predatory actions.”

Edelman is seeking monetary damages and injunctive relief to stop what it claims is “Mariner’s flagrantly unlawful conduct.”

So far, through Mariner’s ”unlawful efforts,” the firm has “procured hundreds of breaches of contract by the departed Edelman planners and has caused the departure of at least 851 Edelman clients representing over $621 million” in AUM, the suit states.

Edelman states that it seeks damages and injunctive relief “to prevent further harm to its business.”

Employment Agreement Breaches

A “direct competitor” of Edelman, Mariner, founded in 2006, “is a relatively new company and has significantly fewer resources to devote to research, marketing and client development,” the suit contends.

(Edelman Financial Engines is the product of a merger in 2018 between Edelman Financial Services, founded in 1986, and Financial Engines, founded in 1996.)

“Evidently intent on free-riding off Edelman’s enormous investments in identifying clients and developing goodwill, Mariner has launched an unlawful campaign to hire away high-performing Edelman financial planners and incentivize them to disclose the proprietary client information Edelman has spent decades curating,” the suit states.

Mariner “has also knowingly procured multiple breaches of the departed Edelman planners’ employment agreements, which required them to keep Edelman’s client information confidential, and prohibited them from soliciting and accepting business at Mariner from the Edelman clients they serviced,” the suit maintains.

Mariner has not responded to a request for comment.

Melanie Waddell

@Think_MelanieW

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