Smaller Financial Firms Are Taking Actions in a Fight over Who “Owns” the Client Relationship

Posted on August 23rd, 2019 at 3:49 PM
Smaller Financial Firms Are Taking Actions in a Fight over Who “Owns” the Client Relationship

From the Desk of Jim Eccleston at Eccleston Law LLC:

Wirehouses and its advisors currently are at war for the control over clients and their assets. The fight is getting nasty as major broker-dealers are taking legal actions against advisors who leave one firm and join a competitor. Legal actions, including TROs (temporary restraining orders), are intimidating advisors and confusing clients.

According to a recent InvestmentNews article, smaller financial services firms, including registered investment advisors ("RIAs"), are following the large brokerage firms' strategy. For example, Mercer Global Advisors Inc. recently sued an adviser who left the firm for a competitor, Mission Wealth Management. The adviser allegedly took confidential information from Mercer, including addresses, personal and demographic information related to clients, to his new firm, according to the complaint. Mercer argues that it secures all client acquisitions for the adviser and that the adviser has nothing to do with client acquisition.

On the other hand, RIAs are fiduciaries, and countervailing arguments may be available. As one can see, advisers should retain competent legal counsel to plan their transitions.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, wirehouses, temporary restraining orders, ria, registered investment advisors, client acquisition

Return to Archive



We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele


September 20, 2023
SEC Orders Legendary Capital Founder and REIT Advisors to Pay Nearly $5 Million

Corey Maple, co-founder of non-traded REIT sponsor Legendary Capital, has agreed to a $100,000 civil penalty to settle charges brought by the Securities and Exchange Commission (SEC).

September 19, 2023
Reg BI Violations Lead to FINRA's Fine on Another Broker-Dealer

The Financial Industry Regulatory Authority (FINRA) has fined and censured broker-dealer Network 1 Financial Securities and its chief compliance officer for violating Regulation Best Interest (Reg BI).

September 18, 2023
Troubles at an Arizona Park Funded by Municipal Bonds Are a Warning to Investors

The recent financial troubles at a sports arena in Mesa, Arizona, demonstrate that not all municipal bonds are equally safe.