Edward Jones

2014

From the Desk of Jim Eccleston at Eccleston Law Offices:

According to the J.D. Power U.S. Financial Advisor Satisfaction Study, Edward Jones, Raymond James & Associates, and RBC Wealth Management ranked the highest three among advisory firms for advisor satisfaction.

The study considered seven factors for determining advisor satisfaction: professional support; client-facing support; compensation; firm leadership; operational support; problem resolution; and technology support. Among those factors, firm leadership and compensation are the most important drivers in determining advisor satisfaction. Advisors value that their leaders communicate effectively on the strategic vision of the firm and create a culture of accountability. Advisors also are sensitive to a competitive pay package as well as consistent and transparent compensation plans.

However, according to the survey, a third of advisors said that they lack a complete understanding of their compensation plan, and less than half of advisors indicated that the cultural value of the firm and client focus were the primary reasons for them to stay at their current firm.

Moreover, the study also revealed that the brokerage industry shows low adoption of new technology. Less than 30% of surveyed advisors use smartphones or tablets to leverage their businesses.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Oct

2013

Jim Eccleston: Non-Solicitation Agreements: What Can You Say Without Crossing the Line?

From the Desk of Jim Eccleston at Eccleston Law:

John Lindsey, a former Edward Jones broker, found himself in hot water after accusations that he violated his non-solicitation agreement. In March 2012, Mr. Lindsey left Edward Jones to go independent, taking with him about half his clients. In response, Edward Jones promptly filed a request for an injunction and temporary restraining order. Edward Jones claimed Mr. Lindsey had violated his one-year non-solicitation agreement by misappropriating client information and wrongly soliciting clients. Specifically, Edward Jones’ non-solicitation agreement prohibits an advisor from soliciting clients of the firm for one year after the advisor’s departure.

In May 2012, the Ventura County Superior Court in Ventura, California granted the injunction, upholding Edward Jones’ non-solicitation agreement. However, Judge Tari Cody’s also found that nothing in that agreement prohibited Mr. Lindsey from servicing Edward Jones clients who reached out to him directly. Subsequent to the ruling, Edward Jones asked a FINRA arbitration panel to make the injunction permanent and requested $5 million in compensatory damages. Both of those requests were denied.

The arbitrators’ decision reaffirmed previous guidance given by FINRA’s predecessor, the National Association of Securities Dealers, which had issued a notice stating “that obtaining temporary restraining orders to prevent customers from following a registered representative to a different firm may be similar to the unfair practice of delaying transfers” of clients to a new advisor.

FINRA’s position has been that firms cannot do anything to stop clients from going to a broker of their choice. The court’s ruling reflects a similar position, stating that “[n]othing herein [the non-solicitation agreement] shall prohibit [Mr. Lindsey] or anyone else from: (a) continuing to provide services to [Mr. Lindsey’s] clients who have already moved business away from Edward Jones; (b) providing services to persons who have indicated that they wish to transfer their accounts from Edward Jones to permit [Mr. Lindsey] to continue as their financial advisor.”

The attorneys of Eccleston Law represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.