The previously unreported case reflects shifting dynamics in the channel as the largest tax-focused wealth management firm hits one of its closest rivals with litigation.
Increasingly, advisor departures and transitions are between RIAs and not from b/ds to RIAs, according to Hamburger Law Chief Litigation Counsel Sharron Ash.
Legal issues related to hiring and firing advisors are becoming more commonplace, says RIA counselor Brian Hamburger.
As the independent registered investment advisor channel continues to grow, firms are getting larger; many RIAs now have national aspirations, acquiring firms and, increasingly, recruiting new advisors from established companies.
“With that comes some burdens that we can’t overlook,” said Brian Hamburger, president and CEO of MarketCounsel, speaking at the DeVoe & Company G2 Forum this week. “Not only does the potential for client-related issues and disputes increase, but employment-related challenges are to be expected.”
“As those challenges emerge, the founding advisors are likely to encounter human resource issues and conflicts as diverse as violations of the firm’s own policies and procedures, issues like sexual harassment or discrimination and similar claims, consistent supervision of staff and effective implementation of client relate
Wealthmanagement.com, Christine M. Conboy, VP and assistant general counsel at J.P. Morgan, sought to make those internal divisions clearer. She wrote that the bank s participation in the agreement applies only to “registered representatives in the J.P. Morgan Advisors line of business” with the title of “wealth partner” or “wealth advisor.”
“No other divisions, businesses or employees of JPMS or its corporate affiliates or parents are covered by the Protocol,” the letter read. “That means that registered representatives working in Chase Wealth Management, JPMorgan Private Bank, or JPMorgan Chase & Co. are not covered by the Protocol.”
The letter comes several weeks after the company filed several complaints in federal court against former branch-based advisors allegedly soliciting clients. It s not clear the clarification letter is in reaction to those cases.