Mariner Wealth Advisors, one of the nation’s leading registered investment advisors known for acquiring smaller practices, is currently involved in multiple lawsuits pertaining to allegations of improper solicitation of clients from rival firms.
Lawsuit in Los Angeles County
Earlier this month, RWA Wealth Partners filed a lawsuit against Mariner in Los Angeles County Superior Court. The complaint claims that Mariner collaborated with an employee from a previous firm, referred to as an “inside man” and a “double agent.” This individual allegedly utilized their access to the firm’s systems to provide Mariner with sensitive business information and assist in the process of “stealing clients.”
Federal District Court Case
On the day before the Los Angeles lawsuit was filed, a federal judge in Iowa approved Mariner’s request to move a similar lawsuit from county court to federal district court. The original complaint, filed by the tax-focused RIA Avantax in Dubuque County District Court on Oct. 24, alleges that a former employee named Michael Carignan who had extensive access to Avantax’s trade secrets and confidential information during his employment began soliciting his former firm’s clients after joining Mariner in September 2023. It is noteworthy that Avantax is now part of Cetera.
Lawsuit by Edelman Financial Engines
In November, Edelman Financial Engines, the largest registered investment advisor (RIA) in the nation, also initiated legal action against Mariner. The lawsuit accuses Mariner of aggressively recruiting Edelman’s advisors and clients through an aggressive campaign, resulting in the alleged “theft” of Edelman’s business.
Mariner Wealth Advisors faces a series of legal challenges as these lawsuits unfold.
Mariner Faces Legal Challenges in Wealth Management Industry
Mariner, a prominent player in the wealth management industry, is currently facing multiple legal claims that have drawn comparisons to the intense litigation often seen in the wirehouse world.
The case specifically involves Polaris Wealth Management, which merged with Adviser Investments and rebranded as RWA Wealth Partners in recent years. RWA claims that Mariner initiated contact with Brandon Berman, a former Polaris wealth manager, and acted as a crafty handler. Allegedly, Mariner encouraged Berman to stay with Polaris for an extended period while they secretly conspired to steal Polaris’ data and clients.
With Mariner declining to comment on the ongoing litigation and their attorneys remaining tight-lipped as well, the outcome of these legal challenges is yet to be determined. However, the accusations made against Mariner highlight the high-stakes nature of competition within the wealth management industry.
Allegations of Misconduct and Client Poaching
The complaint filed against Berman and Mariner highlights a disturbing pattern of misconduct within Polaris. According to the complaint, Berman allegedly exploited his privileged access to Polaris’ systems in order to compile a comprehensive client list, consisting of proprietary information. This sensitive data was then shared with Mariner, who purportedly coached Berman on how to secretly export and distribute client information. Moreover, Mariner allegedly assisted Berman in crafting messages designed to undermine the trust clients had in Polaris, ultimately enticing them to transfer their business to Mariner.
RWA, the organization bringing forth the allegations, maintains that Berman has corroborated many of these claims in a previous sworn deposition. As a response, Polaris initiated a legal action by filing an arbitration claim and a complaint in superior court against Berman in 2022. This legal victory resulted in a restraining order and an injunction being imposed on Mariner. However, RWA contends that Mariner has wilfully disregarded this court order.
Berman has yet to address the allegations, having not responded to any requests for comment made via phone or email.
Financial Impact and Confidentiality Concerns
RWA asserts that, as a direct consequence of the collaboration between Berman and Mariner, almost 100 clients defected from Polaris to join Mariner, taking with them a staggering $60 million worth of assets. In addition to the monetary loss, RWA argues that the reputational damage suffered is equally significant. Consequently, RWA estimates its total loss in assets under management to be no less than $74 million.
Another complaint, levied by Avantax, centers around Carignan, an individual who is accused of actively enticing clients away from Avantax and steering them towards Mariner, thereby violating his employment agreements. Although lacking the cloak-and-dagger nature of the previous allegations, this complaint reinforces the notion of Mariner’s involvement in client poaching activities.
Avantax vs. Carignan and Mariner: Protecting Proprietary Information
Avantax, a prominent organization, has taken legal action to safeguard its valuable assets against Carignan and Mariner. They are seeking an injunction and the return of their proprietary information. Additionally, damages are being requested to address any harm incurred.
RWA and Edelman also demand justice
In a parallel legal battle, RWA and Edelman are pursuing their own case against Mariner. Similar to Avantax, they are seeking damages and an injunction, among other forms of relief. This initiative aims to hold Mariner accountable for any potential wrongful actions.
Having identified the gravity of the situation, these organizations are determined to protect their proprietary information and seek appropriate reparations. The legal proceedings will determine the outcome of these disputes, ensuring justice is served.