Both Empower and Compound Planning offer investment advisory services, retail brokerage accounts, retirement planning, investment management, tax planning, estate planning, insurance analysis, education funding and digital wealth management, according to Empower.
The allegations: The 13 advisors who moved to Compound Planning were Personal Capital employees when Empower closed on the 2020 deal, according to Empower.
The employees could provide advisory services to individual clients as well as to participants in employer-sponsored retirement plans, and Empower provided the advisors with confidential client information to help them service the clients.
The advisor employees signed confidentiality, non-solicitation and intellectual property assignment agreements, Empower says.
Empower alleges that the former employees used trade secrets and Personal Capital brand goodwill to market to Empower clients. It cites a trade journal article quoting the firm’s CEO as saying the firm wanted to appeal to breakaway advisors who were looking for a better experience.
“‘Breakaway advisors’ is a euphemism for advisors, like the individual defendants, who can leave a firm and take clients and assets with them notwithstanding any contractual and trade secret obligations the advisors owe to their current employers,†according to the complaint.
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