Mariner Wealth linked to American Century’s rigged hiring scheme

The American Century Cos. in 2021 admitted in a federal settlement with the Department of Justice that it had conspired with a wealth management firm also located in the Kansas City, Missouri, area, to dampen the local job market by suppressing and eliminating competition for workers.

In other words, in a anti-competitive, no-poach scheme, American Century wouldn't hire staff members from the other, unnamed firm, and that firm wouldn't pursue theirs. Such a plan harms workers' ability to move freely to new jobs in the marketplace and potentially suppresses wages, benefits, and future earnings.

Now, according to a recent lawsuit seeking class-action status, it turns out that the other firm was Mariner Wealth Advisors, a giant registered investment advisor based in Overland Park, Kansas, and a leading buyer and aggregator of RIAs over the past decade.

According to the complaint, Mariner recently signed a non-prosecution agreement with the Justice Department and admitted "to its illegal, anticompetitive scheme," avoiding criminal prosecution as part of the deal.

In an industry that is as grounded in capitalism as the financial advice business, two significant institutions like American Century, with $200 billion in assets, and Mariner Wealth, with $104 billion, admitting to anti-competitive behavior is no small matter.

The most significant cost facing RIAs and wealth management firms is labor, industry sources noted, so the formerly secret agreement between American Century and Mariner Wealth, which dates back to 2014, puts the firm first.

"That's why the DOJ has antitrust rules and regulations," said Max Schatzow, an industry attorney, who had no direct knowledge of the matter. "It's a violation of federal laws, and anti-capitalist and anti-competitive."

“Neither of the plaintiffs in this lawsuit are current or former American Century Investments employees,” a spokesperson for the company said. “American Century is committed to fair and honest competition in compliance with all laws and regulations. The company will address the claims made in this lawsuit in court.”

Marty Bicknell, CEO and owner of Mariner Wealth Advisors, did not return calls on Wednesday to comment.

The two employees suing Mariner Wealth Advisors, American Century, and various related companies are Jakob Tobler and Michelle McNitt. The civil complaint, which is seeking class action status, was filed February 23 in federal court in Kansas City.

From 2014 to 2021, Tobler was a research analyst and then senior associate with Tortoise Capital Advisors and another Tortoise-branded firm, according to the complaint. Tortoise Capital was a money manager majority-owned by Mariner Holdings and Bicknell, which was sold in 2017 to private equity buyers, including Lovell Minnick Partners.

McNitt was a trading assistant and then a trader at the Tortoise-branded firms from 2016 to 2022, according to the complaint. Attorneys for Tobler and McNitt did not return calls seeking comment.

The scheme extends back at least a decade, according to the complaint. By March 2014, if not earlier, Mariner Wealth, American Century and various related companies "explicitly agreed not to hire or recruit each other’s asset and wealth management professionals," according to the lawsuit.

"The purpose and consequence of this unlawful agreement was so that [Mariner Wealth, American Century and various related companies] could artificially depress their own labor costs, thereby depriving workers of the compensation they would otherwise earn in a competitive marketplace," according to the complaint. "Defendants expressly discussed this shared objective with each other, and each of them knew that this was the conspiracy’s overarching goal."

American Century signed off on its non-prosecution agreement with federal investigators in 2021, while Mariner reached its agreement last year. American Century has set aside $1.5 million to compensate the victims of the rigged employment practices, while Mariner has reserved $1 million.

"Through the non-prosecution agreement, Mariner admitted to its illegal, anticompetitive scheme," according to the complaint. In return for its cooperation and acceptance of responsibility for violation of federal laws, the Department of Justice agreed not to pursue a criminal case in the matter.  

Meanwhile, Mariner is facing a handful of lawsuits from large competitors over hiring practices. Those other firms include Edelman Financial Engines and Avantax.