Investment Advisor’s Notification to Clients of “Options” Amounts to Solicitation

Author: Dean Crawford, KC

February 6, 2023 Topics: Injunctions, Investment Advisors, Non-Solicit Enforceability, Restrictive Covenants

During the running of a one-month notice of resignation given to her employer, an investment advisor wrote to the firm’s clients advising of her departure to establish a new business and of their investment options: staying at the firm, move to her new business or going elsewhere.

In responding to the firm’s application for an interlocutory injunction, the advisor argued this was not a form of solicitation, only the explanation of options. The Ontario Superior court had no hesitation in disagreeing, stating:

… the only possible interpretation of her letter to “her” clients is effectively a form of solicitation. The fact that she advised clients that they had the three options does not change the fact it was a form of solicitation.

The Court’s decision can be found here: Black v. Mandeville Private Client Inc., 2023 ONSC 465 (CanLII)