RIAs Increasingly Rely on Non-Competes Borrowed From Broker-Dealers

Posted on December 22nd, 2022 at 12:15 PM
RIAs Increasingly Rely on Non-Competes Borrowed From Broker-Dealers

Registered investment advisory firms (RIAs) have borrowed a legal tactic from the broker-dealer space, as RIAs increasingly take defectors to court with allegations of non-compete clause violations, according to a recent article published by AdvisorHub

RIA non-compete disputes are different, however.  First, the disputes are not adjudicated at Financial Industry Regulatory Authority (FINRA) Dispute Resolution, because neither party is associated with FINRA. Typically, the disputes start in court, and they will remain in court unless there is an arbitration clause, such as an American Arbitration Association (AAA) arbitration clause. 

Notwithstanding where they dispute is adjudicated, competent counsel must examine the contractual restrictions carefully, and then must test the enforceability of such restrictions against applicable state law.  There is no national jurisprudence, nor any one-size fits all approach. Finally, legal requirements and proofs vary in each state as to whether a plaintiff, in these cases a RIA firm, can obtain a TRO or injunctive relief.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters, including disputes nationwide in courts and in arbitration surrounding restrictive agreements.

Tags:

Return to Archive

TESTIMONIALS

Previous
Next

If you find yourself in trouble with the regulators, call Eccleston Law, you won't regret it.

Rick R.

LATEST NEWS AND ARTICLES

February 19, 2026
Wall Street Journal Analysis Questions Investor Gains Following DuPont's Decade-Long Breakup

A Wall Street Journal analysis has raised questions about investor returns following DuPont’s multi-year corporate restructuring, which divided the historic conglomerate into multiple independent companies.

February 18, 2026
American Portfolios Ordered to Pay $4.6 Million in Restitution Over Cash Sweep Program Disclosures

The Financial Industry Regulatory Authority (FINRA) has ordered American Portfolios Financial Services to return $4.6 million to customers and pay monetary sanctions after determining that the firm overcharged investors and failed to properly disclose how it generated revenue through a cash sweep program.

February 17, 2026
FINRA Fines Kingswood Capital Partners $150,000 for Supervisory Failures in GWG L Bond Sales

The Financial Industry Regulatory Authority (FINRA) censured and fined San Diego–based broker-dealer Kingswood Capital Partners $150,000 after finding supervisory failures tied to sales of high-risk GWG L bonds.