Choreo loses bid to stop advisors who left with $400M in clients

A federal appeals court just handed advisory firms a major loss in their fight to stop advisors from walking out the door with clients.

The Eighth Circuit ruled January 12 that Choreo can't force 12 advisors back under a preliminary injunction after they left for a competitor with $400 million in client assets. The decision in Choreo, LLC v. Kevin Lors could reshape how firms try to enforce non-competes and non-solicits when their advisors jump ship.

Here's what happened. Four senior advisors at Choreo's Des Moines office quit in January 2025 and joined Compound Planning, a competing investment advisory firm. Their employment contracts had the usual restrictions: don't solicit our clients for a year or two, don't steal our secrets, don't poach our people.

But then things got really interesting. A few weeks later, eight of the nine remaining Choreo advisors in Des Moines resigned all at once and followed their colleagues to Compound. The competing firm was apparently paying what the court called "lavish incentives" to keep serving their former clients.

For Choreo, this was a disaster. Within two weeks, over 100 clients representing roughly $400 million in assets had moved to Compound. That was about a third of the entire branch's business, gone.

The departing advisors didn't exactly tiptoe out quietly either. They emailed former clients saying they'd left Choreo and weren't servicing their accounts anymore, then helpfully included their contact info at the new firm. One advisor sent a client Compound's website, fee schedule, and two PDFs about how to transition. They all posted about the move on LinkedIn.

Choreo sued everyone involved and asked a judge to stop the bleeding with an emergency order. The district court initially said no, but then granted a sweeping preliminary injunction that essentially froze the advisors out of working with any former Choreo clients.

That's where the appeals court stepped in and changed everything.

Judge Loken, writing for the three-judge panel, said Choreo failed to prove it would suffer irreparable harm without the injunction. And here's the thing that matters: the court said Choreo's losses were just regular money damages that could be calculated later.

Think about it from the court's perspective. Choreo charges clients a percentage fee based on their account size. The firm knows exactly how much those 100+ clients had in assets. It has its own fee schedule right there in the record. So at trial, a jury could easily figure out how much money Choreo lost in fees. You don't need an injunction when you can just write a check at the end of the case.

The court even quoted another case pointing out that "the financial services industry is uniquely skilled at computing the economic value of a given client." In other words, if anyone can put a price tag on a lost client relationship, it's wealth managers.

Choreo tried arguing that losing client goodwill was impossible to calculate. Two employees even filed declarations saying so. But the appeals court wasn't buying it. Those statements were too vague, just saying the harm was incalculable without explaining why.

Choreo's other argument didn't land either. The firm said it was irreparably harmed because the departures left the Des Moines office unable to function. But the court pointed out that damage was already done by the time the injunction was granted. Nearly everyone had already left, and there was no evidence the defendants were trying to recruit the one remaining employee.

The case now goes back to the trial court where Choreo can still pursue its breach of contract and interference claims. The appeals court left the door open for a permanent injunction after a full trial, but that's a long way off.

For advisors thinking about making a move, this case doesn't give you a free pass to ignore your restrictive covenants. The court only said Choreo couldn't get emergency relief right now. The firm could still win money damages or even a permanent injunction later.

But the decision does show that courts are skeptical when firms claim the sky is falling every time advisors leave. Especially in an industry where lost revenue is pretty easy to calculate.