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The Moore’s the merrier

The Moore’s the merrier

Raymond James UK is known mainly in the UK for one thing: a bitter court fight with rival Towry.

In 2009, seven advisers from Edward Jones who had been taken on by Towry, left for Raymond James. They wanted to take their clients with them, only for Towry to object, and it ended up suing both the advisers and Raymond James. In the end, Raymond James and the advisers won.

The case revolved around the concept of non-solicitation clauses and non-dealing clauses; Edward Jones contracts contained the former while Towry contracts the latter. The judge concluded that the two were not the same and that non-dealing clauses were not industry standard.

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The consequences are still rolling on, according to Peter Moores, chief executive of Raymond James.

Apparently, more and more non-dealing clauses are being inserted into advisers’ contracts to prevent them from taking their clients with them.

He said: “As a consequence of the case there have been more firms changing their non-solicitation clauses to non-dealing – an adviser will say, ‘I have a clause in my contact that says I’m not allowed to deal with you’. You can’t deal with him for 12 months.”

“Non-solicitation is if you were my former client I wouldn’t be soliciting your business if you left the firm, but you’re allowed to come to me and do business with me.”

However, two years on from the case, it seems its main instigator may be relenting even on that. Mr Moores said that he had someone join him from Towry who had a non-dealing clause in their contract, but a client from Towry wanted to keep using him as his adviser.

The client in the end wrote to Towry, asking for it to be repealed, and the company relented, according to Mr Moores.

Mr Moores said: “Towry waived non-dealing clauses for some clients, but why should the client go through that step? It’s a difficult process to go through for a customer.”

Mr Moores understandably objects to these clauses completely. He said: “If the customer decides they want to stay with the adviser, are you really going to be able to prevent that, or will you disrupt the customer for the next 12 months?

“We have 6,200 wealth managers in the whole group, and they have no non-dealing restrictions, but we’re able to retain and attract clients. Some people say we have to work harder because investment managers could walk at any time.”

Despite the drama of being involved in the court case, Mr Moores is perhaps surprisingly neutral about Towry’s motivations for taking action in the first place.

He said: “They wanted to protect their business. They had just bought this business and were concerned that assets would walk out the door. That was the only reason behind it. They wanted to protect it – they may have believed that non-solicitation and non-dealing were the same.”