Edelman Financial Engines Lawsuit Centers on Advisor Restrictions

A lawsuit has been filed against Edelman Financial Engines, alleging that the company restricts its advisors from providing certain services to clients. The lawsuit claims that Edelman Financial Engines has a policy of limiting advisors' ability to offer comprehensive financial planning and investment services.

The company's advisors are reportedly required to follow a specific business model that prioritizes high-fee investment products over more affordable options. This has led to accusations that Edelman Financial Engines is prioritizing profits over its clients' best interests.

The lawsuit alleges that Edelman Financial Engines' business model is designed to maximize revenue for the company, rather than providing the best possible services to its clients. This has resulted in some advisors feeling pressured to compromise their professional judgment in order to meet the company's sales targets.

Kwan alleges that Edelman took several steps to degrade his ability to serve clients, including a 4% total compensation cut in 2019 or 2020.

Edelman's restrictive covenants in the agreements are at the center of the lawsuit, with Kwan seeking a judicial determination on their enforceability. He claims that these covenants are unenforceable under California laws banning non-compete and non-solicitation provisions.

Kwan's client service associate, D.T., was critical to maintaining a high level of customer service and satisfaction, but Edelman refused to allow Kwan to promote D.T. to analyst, despite Kwan's repeated requests.

Kwan is barred from initiating contact with past, current, or potential clients to induce them to leave the firm for two years following the end of his employment.

The non-solicitation provision in his employment contract is not enforceable under California laws banning non-compete and non-solicitation provisions.

These laws deem non-solicitation provisions that aren't limited to protecting trade secret information as void and unenforceable.

Kwan also signed a "contribution agreement" in January 2016, which contains unenforceable non-solicitation provisions that prohibit him from soliciting clients for 15 months after his employment ends.

He's also barred from accepting business from clients who received services from Edelman or its subsidiaries, even if the client wasn't solicited.

Kwan seeks a court order to stop Edelman from enforcing these non-solicitation covenants and wants compensatory damages.

Kwan, the former executive director, financial planning at Edelman, alleges that the company failed to provide necessary resources to properly serve clients.

Edelman's lack of resources made it difficult for Kwan to provide good client service, which is a critical aspect of his job.

A client service associate, D.T., was an important part of Kwan's team and was critical to maintaining a high level of customer service and satisfaction.

Kwan sought approval from upper management to promote D.T. to analyst, but was denied, despite having a larger book of business and longer tenure with Edelman than another advisor who was allowed to hire additional staff members.

Kwan was willing to personally cover a raise for D.T. if it meant keeping him on the team, but Edelman's decision to deny the promotion led to D.T. being courted by another company.

A former advisor at Edelman Financial Engines has filed a lawsuit against the firm, alleging that company policies and a non-solicitation provision in his employee contract are unenforceable.

The advisor claims that the firm's policies degraded his ability to serve clients.

One of the key issues at play is a provision that bars the advisor from contacting past, present, and potential clients for two years after leaving the company.

This non-solicitation provision is a major point of contention in the lawsuit.

Here are the key details of the lawsuit:

The Staben v Edelman, LLC case is a part of the Edelman Financial Engines lawsuit. Financial Engines, Inc. is the plaintiff in this case.

The Civil Case Cover Sheet provides a brief overview of the case, but it doesn't reveal much about the specifics of the lawsuit.