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

Thank you for your professional assistance with this matter. You are very good at what you do.

John T.

LATEST NEWS AND ARTICLES

November 18, 2025
Former FINRA Brokers with Misconduct Histories Flock to Insurance Industry, According to Recent Study

A recent academic study reveals that thousands of brokers expelled from the securities industry for misconduct nonetheless continue to operate under state insurance licenses, often selling annuities and other financial products to unsuspecting clients.

November 17, 2025
FINRA Launches Targeted Probe into Small-Cap Foreign IPO Underwriters

The Financial Industry Regulatory Authority (FINRA) has launched a targeted investigation into broker-dealer firms that helped small foreign companies go public in the U.S., marking its latest move to combat pump-and-dump schemes.

November 14, 2025
FINRA Bars Former Edward Jones Broker in Crypto-Related Investigation

The Financial Industry Regulatory Authority (FINRA) has barred former Edward Jones representative Robert David Bienvenu for refusing to provide requested information and documents related to outside accounts and investments.