LPL Blasts Ameriprise Recruiting Suit as 'Public Relations Stunt'

“For years, advisors have left Ameriprise for many reasons, including that LPL offers a superior opportunity for them to serve their customers. Frustrated by its failure to compete in the market, Ameriprise has become increasingly desperate to stamp out competition from LPL, and is abusing the courts in an attempt to meet its ends,” LPL contends.

Amerprise has shown “zero evidence” that LPL has done anything wrong but seeks an “extraordinarily broad and draconian request to restrict LPL’s business” that “would gravely harm advisors, their clients and the competitive market for advisor services,” LPL contends.

Kenoyer, in his response, contends Ameriprise’s complaint against him and LPL “is just the latest salvo in an economic war Ameriprise is attempting to wage against its competitor, LPL Financial, … and its former financial advisors for electing to resign from the company and move their practices to LPL.”

Kenoyer called the lawsuit and FINRA arbitration at least the fifth Ameriprise has filed in the past six months against financial advisors who have resigned and transferred to LPL, accusing his former employer of anticompetitive conduct.

“The allegations in each action are largely the same without any regard to the truth. Simply put, Ameriprise is filing baseless cases as a tool of corporate warfare. Individual advisors like Kenoyer, and their clients, if the Motion is granted, are caught in the crossfire,” the advisor said.

Kenoyer also contends he didn’t violate the broker protocol because while he did notify clients about his dissatisfaction and likely departure from Ameriprise, he did so with the ongoing knowledge and implicit consent of an Ameriprise vice president over five months.

An Ameriprise spokesperson, in a statement to ThinkAdvisor by email Monday, repeated its earlier comments on the cases.

In the California complaint against LPL, Ameriprise said the facts “are clear, compelling and concerning. We’ve seen a widespread pattern where LPL allows, encourages and misleads its advisors to blatantly violate the protocol for broker recruiting, among other industry standards and regulations by harvesting and misappropriating Ameriprise’s confidential client information and trade secrets.”

Ameriprise considers LPL’s conduct unacceptable and contends it “abandons all reasonable notions of client privacy rights. It also subjects the advisors it recruits to regulatory, and in some cases, even criminal exposure by encouraging this type of behavior,” Ameriprise said.

“LPL is reckless and putting clients at risk by instructing the new advisors it recruits to upload spreadsheets with confidential client information into LPL’s systems — including, but not limited to Social Security numbers, date of birth, net worth and detailed account information, to poach clients without prior knowledge or consent,” Ameriprise said.

In the case against Kenoyer and LPL, Ameriprise said the advisor “blatantly breached” the broker recruiting protocol, “misappropriated sensitive client data and stole trade secrets. We look forward to presenting our evidence and proving our claims in court.”