The Ameriprise v LPL Financial Services dispute is a significant issue in the financial industry.
Ameriprise Financial, a financial services company, filed a lawsuit against LPL Financial Services, a rival company, in 2018.
The lawsuit claimed that LPL Financial Services had poached Ameriprise Financial's advisors, leading to a loss of business and revenue.
LPL Financial Services denied the allegations, stating that their recruitment of Ameriprise Financial's advisors was legitimate and not a violation of any agreements.
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Ameriprise vs LPL: Legal Dispute
Ameriprise and LPL Financial are locked in a heated legal dispute over advisors leaving their firms, with both sides accusing each other of breach of contract and misuse of confidential client information.
LPL Financial and Ameriprise Financial Services, LLC are the two firms at the center of the controversy, with separate lawsuits filed against each other.
The lawsuits highlight the intense competition between financial services firms to attract and retain top advisors, often resulting in high-stakes legal battles.
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Legal Battle Escalates
Ameriprise Financial filed a lawsuit against LPL Financial in 2020, alleging that LPL was attempting to poach Ameriprise advisors with false and misleading statements.
The lawsuit claimed that LPL was making false promises to Ameriprise advisors about the financial benefits of joining LPL.
Ameriprise accused LPL of stealing its proprietary recruiting materials and using them to lure away its advisors.
LPL denied the allegations, stating that its recruiting efforts were legitimate and did not involve any misrepresentation.
Ameriprise claimed that LPL's actions were a direct result of its own failed attempts to recruit Ameriprise advisors.
The dispute has been ongoing for several years, with both companies making claims and counterclaims in court.
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Wealth Management.com’s Post
Ameriprise and LPL Financial are engaged in a heated legal dispute over advisors leaving their firms, with both companies accusing each other of wrongdoing.
LPL Financial and Ameriprise Financial Services, LLC are the two companies involved in the separate lawsuits.
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Broker Protocol and Confidentiality
Both Ameriprise and LPL Financial are members of the Broker Protocol, which allows representatives to take a limited amount of information with them when they depart for a new firm.
The Protocol is meant to reduce costly litigation that used to be commonplace when a broker went to work for a new firm.
Despite being members of the Broker Protocol, Ameriprise alleges that LPL Financial is encouraging former Ameriprise brokers to remove confidential client information.
LPL Financial has referred to the Ameriprise lawsuit as "frivolous", suggesting that the lawsuit is meant to intimidate brokers who may consider leaving Ameriprise to work for LPL Financial.
Brokerage firms regularly recruit from each other, adding to the competitive tension between firms like Ameriprise and LPL Financial.
Ameriprise has won a temporary restraining order to prevent former brokers from soliciting Ameriprise clients, after they allegedly removed confidential documents containing client social security numbers and account information.
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Frequently Asked Questions
What are the criticisms of LPL Financial?
LPL Financial has faced criticisms related to unsuitable investment advice, supervisory failures, and other misconduct, including fiduciary duty breaches and misrepresentation. These issues have led to regulatory actions and lawsuits against the company.
Does LPL Financial charge high fees?
LPL Financial's fees are relatively low, with a program fee of 0.35% and advisor fees not exceeding 1%. This suggests that LPL Financial may be a cost-effective option for investors seeking financial guidance.
Where does LPL Financial rank in the USA?
LPL Financial is ranked #4 among custodians in the US and #1 in total revenues among Independent Broker-Dealers.
Are Ameriprise fees high?
Ameriprise fees are relatively high due to the complex and personalized services offered, but the firm prioritizes fee transparency. While costs may be higher than some competitors, the value of tailored advice may outweigh these expenses.
What happened in the Ameriprise scandal?
Ameriprise Financial faced a Securities and Exchange Commission (SEC) probe into off-channel communications by employees for business purposes, resulting in a $50 million settlement. The company recorded a $50 million accrual to resolve the SEC investigation.
Sources
- https://www.thewealthadvisor.com/article/legal-battle-between-ameriprise-and-lpl-financial-intensifying
- https://www.kurtalawfirm.com/blog/lpl-financial-vs-ameriprise/
- https://www.linkedin.com/posts/wealthmanagement-com_lawsuits-pit-ameriprise-lpl-in-economic-activity-7253142103801655296-nofi
- https://www.courtlistener.com/docket/68995071/ameriprise-financial-services-llc-v-lpl-financial-llc/
- https://www.wealthmanagement.com/industry/ameriprise-sues-lpl-over-widespread-misuse-client-information
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