Former Ord Minnett adviser embroiled in client solicitation dispute

ord minnett legal federal court

30 October 2023
| By Laura Dew |
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A former Ord Minnett financial adviser has been temporarily banned from contacting former clients after 17 clients moved over to her new employer.

Faye Longmuir, a former adviser in the firm’s Perth office, had her employment terminated on 19 September, and Ord Minnett is now suing her for allegedly soliciting clients to go with her to her new employer Canaccord Genuity.

On 20 October, Justice Darren Jackson ordered Longmuir may not “encourage, persuade or attempt to persuade any client of the applicant or its related bodies with whom the respondent had work-related dealings during the 12 months preceding 19 September 2023 to cease doing business with the group or reduce the amount of business which the person would normally do, or would otherwise have done with the group”.

 

This will apply at any time on or before 19 December 2023 or until final determination of the originating application in this proceeding, whichever is earliest. 

 

Wealth manager Ord Minnett provides stockbroking, financial advice and fund management services from 14 offices, and has 270 private client advisers.

Longmuir worked for the firm’s private wealth business from 20 January 2020 to 19 September 2023, and was in regular contact with around 90 clients. However, the court stressed, she did not “own” the clients and was not entitled to take them when she left.

During the proceedings, hearsay evidence stated Longmuir had already made reference in the workplace to leaving Ord Minnett and joining rival firm Canaccord Genuity on 7 September.

“It is alleged, Ms Longmuir stood up in Ord Minnett’s open plan office and stated words to the effect: ‘I’m going to Canaccord. Who wants to come with me?’ (or ‘Who’s coming with me?’). She is then alleged to have directly asked three other employees present, including a junior staff member James Lobb, if they wanted to go with her to Canaccord.”

That same day (7 September), Longmuir emailed herself a spreadsheet of 85 clients and their information, including their risk profile rate and funds under management, and then made contact with certain clients in the days prior to her termination on 19 September. 

“Although she says she did this regularly during her time at Ord Minnett, the fact that she did it on this particular day provides support for an inference that she had decided to take at least some of her clients with her to Canaccord or, at least, had decided to make provision for the possibility that she would wish to do so in the future,” Justice Jackson said.

“The information is self-evidently sensitive, confidential and valuable in the sense that a competitor who had access to it could use it to attempt to procure the business of the clients listed in it. Ms Longmuir did not contend to the contrary.”

These clients then contacted Ord Minnett to terminate their advice fee or suspend their accounts, even though the firm had not yet terminated Longmuir’s employment or told the clients.

For example, Ord Minnett received an email on 18 September from a couple stating: “Please terminate our advisor fee with Ord Minnett as Faye Longmuir is no longer with the firm. I am in a state of shock and will evaluate my situation with what I am going to do in a couple of months.”

Furthermore, on 4–5 October, according to hearsay information, meetings also appeared in Longmuir’s Outlook calendar that she had set up with two Ord Minnett clients after she had been terminated.

Francis Hegarty, head of private wealth at Ord Minnett, also provided evidence that Longmuir made “disparaging statements” about the firm and her former colleagues and referenced “stealing my clients”. 

“Ms Longmuir appears to have been liberal in making disparaging comments about Ord Minnett and former colleagues there, from at least the time of her termination. This strengthens the likelihood that she was also making disparaging comments to clients, alleged instances of which are referred to below. Also, on several occasions she referred to the Ord Minnett clients she had served as ‘my clients’. 

“It is true that she appears to have had a close relationship with several of the clients, in some cases one that predated her time at Ord Minnett. While that relationship may explain the willingness of some clients to leave Ord Minnett, it also may make it easier for Ms Longmuir to encourage them to leave.”

It is understood some 17 of her former 90 clients terminated their relationship with Ord Minnett. 

Justice Jackson concluded: “I was comfortably satisfied that there was a serious question to be tried that Ms Longmuir had breached her non-solicitation obligation on more than one occasion. It may be that some of the instances just summarised will be explained away after full evidence. 

“It may be that Ms Longmuir’s evidence and that of the clients ends up being accepted. But there was enough to demonstrate that Ord Minnett’s case went beyond suspicion and conjecture, to establish a serious case to be tried.”

Her former colleague, James Lobb, also joined Canaccord in October 2023, but Justice Jackson ruled there was not a serious case to be tried that Longmuir had encouraged him to leave Ord Minnett.

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AUTHOR

Submitted by Pecunia on Fri, 2023-11-03 14:23

Her we go again, the question of the restraint of trade, it would appear based upon the details provided that indeed there was a solicitation of the clients, agreed. However, the question that remains, who owns the clients? Answer, the clients own the clients. If a client was to here from the former advisers office that the adviser has left the firm and this is your new adviser, if the client then chooses to search on the MoneySmart Adviser Register, or other public websites where the adviser is and how they can be contacted, tis would not be solicitation.

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