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

Jim, Stephany and the whole team were a God send.  We felt like we were put into a situation where we had no advocate. Jim’s team came in with a strong, well laid out strategy on how to get our story heard. Where our outside compliance company had no ability to help, our Broker Dealer was impenitent, and the regulators were aggressive pursuing vague rules, Jim came like a barricade against an assault we did not understand. Though you pay member dues to be affiliated with FINRA and a B/D, you have no voice. The only thing that is truly heard in this un-level playing field is a bulldog’s bark like Jim’s. I would encourage anyone to call Jim and his team to find a real ally in the tough and complicated world of securities regulation. They are truly the best.

Greg P.

LATEST NEWS AND ARTICLES

March 13, 2026
Connecticut Advisor Pleads Guilty to Ponzi-Like Investment Fraud and Tax Evasion

Federal prosecutors announced that investment adviser John A.

March 12, 2026
Cape Coral Becomes Ground Zero for Private Lending Strains in Post-Pandemic Housing Market

Cape Coral, Florida, long a magnet for out-of-state real estate investors, now illustrates the growing risks of private lending in residential development.

March 11, 2026
SEC and Commonwealth Financial Network Move Toward Settlement in Revenue Sharing Disclosure Case

The Securities and Exchange Commission (SEC) and Commonwealth Financial Network notified a federal court that they are attempting to resolve a long running enforcement dispute involving alleged disclosure failures tied to revenue sharing payments, according to ThinkAdvisor.