Edelman Financial Engines and Prime Capital Financial have reached a settlement in their legal battle over alleged advisor poaching and client data theft, establishing terms for future advisor transitions between the two RIAs.
Court filings submitted August 4, 2026, in the U.S. District Court for the District of Delaware show the two firms have agreed to a joint stipulated permanent injunction governing the movement of financial planners. The settlement is conditioned on the court's entry of the injunction, after which the parties have agreed to file a stipulation of dismissal.
“We are pleased to have reached a resolution that reflects the importance of protecting client relationships and the confidential information entrusted to our business,” Edelman Financial Engines wrote in a statement to InvestmentNews. “Our focus remains on investing in our planners, empowering them to do their best work, and helping more people achieve their financial goals through trusted, long-term relationships.”
Edelman, a mega-RIA aggregator with nearly $330 billion in assets, filed suit in November 2025 that claimed Kansas-based Prime Capital deployed a “playbook” to successfully recruit a dozen of its advisors and steal confidential client information on clients totaling $1.5 billion in assets. This week’s settlement follows a previous temporary restraining order granted to Edelman in March that prevented two Prime advisors from soliciting clients they previously worked with at Edelman.
“The matter, including all of the underlying cases between Prime Capital Financial Advisors and Edelman, have been resolved to our satisfaction including a stipulated process for hiring in the future,” said a spokesperson for Prime Capital Financial, which manages about $40 billion in client assets.
The injunction establishes a transition protocol that applies any time an Edelman financial planner departs to join Prime Capital. Departing planners must deliver written resignation notice to both their Edelman regional director and the firm's HR department at least 14 business days before their last day of employment. During that window, the planner remains bound by all contractual obligations to Edelman, including confidentiality and non-solicitation duties.
Edelman retains the right to manage the transition period as it sees fit—including placing planners on leave, restricting system access, or reassigning client accounts.
The injunction also requires Edelman to send a joint client notice to each affected client no more than seven business days before a planner's departure date. Prime Capital must reimburse Edelman for the cost of sending those notices by overnight mail.
“The permanent injunction was negotiated between the parties and applies only to those two firms. It does not create a generally applicable hiring protocol for the industry,” Max Schatzow, partner at RIA Lawyers, told InvestmentNews regarding the settlement between Edelman and Prime.
“The settlement is interesting, but it does not establish any meaningful legal precedent and is unlikely to affect how firms recruit advisors, how advisors depart RIAs, or how attorneys counsel their clients,” added Schatzow.
For 12 months following a planner's departure, the injunction bars them from soliciting or initiating contact of any kind with former Edelman clients — by phone, email, text, social media, or through any third party. Prime Capital is prohibited from encouraging, facilitating, or acquiescing in any such contact, and assumes responsibility for ensuring advisors who join comply with those obligations.
The settlement includes carve-outs for family members of departing planners and for advisors whose principal office, client base, and tax residence were all in California in the 12 months preceding their resignation—reflecting that state's limits on non-compete enforcement. The Delaware court will retain jurisdiction over both firms to enforce the injunction going forward.
“For firms seeking a more structured framework for recruiting advisors and reducing risk and ambiguity, the Broker Protocol already exists for both RIAs and broker-dealers,” said Schatzow. “Firms can continue to recruit advisors, but they should independently review applicable employment agreements, prohibit the taking, transfer, or use of confidential information, and avoid conduct that could support a tortious interference claim.”
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