Merrill Lynch Sues Schwab, Dynasty Over $129B Atlanta Advisor Team Breakaway

Merrill Lynch has filed a lawsuit against Charles Schwab, Dynasty Financial Partners, and a group of former Merrill advisors, accusing them of orchestrating a "premeditated corporate raid" by luring a substantial portion of its Global Corporate & Institutional Advisory Services (GCIAS) team, which managed approximately $129 billion in assets, to form a new advisory firm called OpenArc. The complaint alleges that the defendants conspired to poach employees, clients, and support staff, misappropriated trade secrets, and solicited clients in violation of contractual agreements, causing significant harm to Merrill Lynch. OpenArc, operating with support from Dynasty and utilizing Schwab for custodial services, defended the move as a response to client demand for more personalized and flexible financial advisory services. Merrill is seeking injunctive relief to prevent further disclosure of confidential information and solicitation of clients, along with monetary damages. Dynasty Financial Partners has responded by asserting respect for industry protocols and emphasizing advisor and client choice, framing Merrill's actions as a retention strategy based on fear. This legal action highlights the competitive tensions within the wealth management sector, as firms aggressively protect their client bases and intellectual property.