Edelman Financial Engines, a California-based mega-RIA with over $308 billion assets under management, is suing Kansas-based RIA Prime Capital Financial over its alleged advisor poaching scheme to recruit hundreds of Edelman’s clients with nearly $1.5 billion in assets.
According to Edelman’s lawsuit filed Nov. 19 in the U.S. District Court in Delaware, Prime Capital has deployed a “playbook” over the past two years to recruit 12 financial planners from Edelman and is currently recruiting as many as 40 financial planners to leave Edelman. Prime Capital manages roughly $30 billion AUM. Its CEO Glenn Spencer and his son, Grant Spencer, director of M&A and advisor recruiting at the firm, are named in Edelman’s complaint/
“Prime Capital instructs the planners to remain employed at Edelman — sometimes for months — after the planner has already decided and agreed to join Prime Capital, and to use their role inside the Company to continue to access and acquire Edelman’s confidential information for Prime Capital’s benefit,” reads a part from Edelman’s lawsuit.
“Prime Capital instructs the planners to use their position within the Company to access Edelman’s proprietary client database and to clandestinely extract the names and other confidential information on their client lists — through memorization or other undetectable means — so that such information could later be transferred to Prime Capital without leaving evidence of the misconduct. Only after the planners manage to extract Edelman’s confidential client information do they resign."
The complaint seeks damages for Prime Capital’s role in the departures of six advisors who left Edelman between 2023 and 2025 — William “Dale” Kelly, Edmund Callahan, Josh Hederick, Stuart Berrin, Alfonso Burgos, and Joanna Cecilia-Fleming. From the complaint, below is an email advisor Stuart Berrin sent to an Edelman client with the subject line “Leadership Changes at Edelman Financial” on October 15, allegedly almost a full year after he resigned from Edelman.
“I wanted to make you aware of a leadership change at Edelman Financial; their CEO … has stepped down. This marks the fourth CEO transition at the firm in the past seven years. While I’m no longer with Edelman, I still care about keeping past clients informed of notable changes,” Berrin wrote.
“Leadership transitions like this can sometimes signal shifts in firm direction, priorities, or culture, so I felt it was important to share,” Berrin's email further reads. "One of the reasons I chose to join Prime Capital, an advisor-owned firm, is to align more closely with a long-term, stable approach to financial planning— where clients and advisors share the same vision and values.”
Former Edelman Financial president Ralph Haberli was named acting CEO of the RIA in October after Jay Shah stepped down as CEO, a role he held since May 2023. In a statement to Citywire, Prime Capital CEO Glenn Spencer called Edelman’s allegations “baseless” and “anticompetitive.” Edelman’s chief legal and risk officer Allison Amadia sent the following statement to InvestmentNews.
“We are taking appropriate legal action to protect our clients, our advisors, and our business - we will not tolerate the theft of trade secrets and the exploitation of trusted client relationships that Edelman Financial Engines, together with our planners, worked years to build.”
Industry attorney Max Schatzow, partner at the law firm RIA Lawyers, says that "restrictive-covenant, trade-secret, and advisor-raiding litigation" such as cases Edelman brought against Prime Capital are "extremely common in the RIA space." Edelman filed a separate lawsuit in 2023 against fellow RIA giant Mariner Wealth Advisors, accusing the Kansas-based firm of poaching advisors and their clients and stealing trade secrets. That lawsuit remains ongoing.
“Courts generally approach restrictive covenants with caution. They will enforce them only when the provisions are narrowly drafted, supported by legitimate business interests, and reasonable in scope, duration, and geography. Overly broad or protective provisions tend to face significant judicial scrutiny," said Schatzow.
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