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Towry begins court action against former Edward Jones advisers

Towry’s legal action against seven former Edward Jones advisers started yesterday in the High Court.

Towry is seeking £6m in damages from Raymond James and seven former Edward Jones advisers over what it calls unlawful poaching of a large section of its client base.

Towry is claiming the seven advisers breached non-solicitation clauses in their restricted covenants and solicited clients after declining to become Towry employees following the national IFA’s acquisition of Edward Jones for £1 in October 2009.

Towry says within a short period of time nearly 400 clients transferred investments worth over £33m, and their investment business from Towry EJ limited to Raymond James.

The seven advisers are made up of Barry William Prosser Bennett, Pieter Burger, James Scott Chandler, Wayne Alan Hayhurst, Thomas Mark Spain, Stuart Lee Hutton and Tracey Louise Simpson.

Towry counsel’s opening submission argues the defendants’ “wrongful conduct has caused very significant losses, amounting to nearly £6m, for which it seeks damages”.

Raymond James opening submission claims that Towry has no evidence of solicitation by the advisers in question and that “the defendants were simply followed by their clients”.

Counsel for the defence added that Towry’s claim for £5.8m “is a simply preposterous proposition that should never have been pleaded”.

The defence says Towry was only interested in its ability to churn client’s investable assets into its own discretionary find management proposition, the Independent Investment Management service, because it planned to “fatten itself up to have an IPO within two years of acquisition”.

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. This will be a very interesting case.

    How do your prove that they have solicited clients?

    When will people learn – clients build up relationships with the adviser not the firm.

  2. Nice, when Towry took commission via EJ clients, and now want to to either re-charge them to stay or charge exit penalties to leave and do not seem to be able to ID Trail commissions running on policies, to offset any of the costs they want to charge

  3. Graeme Scotland 9th June 2011 at 9:20 am

    Poaching clients from Towry??? Hmmm more like shielding them from Towry and excess charges. Stop crying in your cornflakes Towry live with it …

  4. A lot of Lawyers will be making a lot of money out of Towry who are very ‘sue’ happy. However, would you want to deal with this company ?

  5. People in glasshouses really shouldn`t throw stones!

  6. George Wilikns 9th June 2011 at 11:13 am

    I would have thought that the clients in question where clients of the guys irrespective of the company they where with when business was done. We all know that that’s how the business works always has. So why are they Towry clients? Ask the clients who their adviser is, that should settle it. Good luck ex E J guys !!

  7. Been there before 9th June 2011 at 1:54 pm

    Well, I was in this boat once with a bullying firm trying to claim ownership of the clients I’d spent years looking after and building a relationship with.
    The purpose of the restrictive covenant is to give the firm a chance to try to build a relationship with the client and so the length of time that the clause prohibits contact for is very important. In my case it was a two year clause. The firm was then asked in the first 5 minutes of my hearing how long it would take for them to contact and see all the clients, the reply to which was about a month. They then couldn’t justify a 2 year restriction and so the whole of the restriction is removed from the contract – case over. I wonder how long the contractual restriction was for?

  8. Lindsay Lockett 10th June 2011 at 12:36 am

    How do they get a business loss of £5.8m from business outflows of £33m over a period since Oct 2009. Did they plan to extract (or re-extract) that level of commission (oops fee) from those poor clients. I hope the FSA are watching this case.

    Hey Mr Fisher don’t forget you have also saved the salaries that you would have paid to these 6 advisers for the rest of their career and you also save the costs of having service the client in the £33m pot.

  9. Julian Stevens 10th June 2011 at 9:50 am

    Accusations such as this are notoriously difficult to prove and the value of any losses is at least as difficult to quantify. TL’s position is hardly likely to be stengthened by its very poor reputation for customer service and the fact that many EJ clients may well have dealt with their EJ adviser for many years. How does TL plan to prove who contacted who first? And is it reasonable for the TL contract of engagement effectively to prevent EJ clients from continuing to have their affairs dealt with by their former EJ advisers, if that’s what they want? Doesn’t such a clause conflict with the FSA’s requirements for customers to be treated fairly?

    It’ll be interesting to see how this case progresses.

  10. Fools and their money are soon parted…

    The contract will invariably be unenfotceable.

  11. Tell me one thing: just how did TL know to whom the clients had transferred their relationship?

  12. How many barristers did Fishy try before one was prepared to take the case?

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