Australian Wealth Manager Wins Reduced Compensation Against Goldmans Advisor

Stephen Harris

26 February 2007

Angela Manning, a financial planner at Australia’s Goldman Sach JB Were has been ordered to pay $45,000 to AMP's Arrive Wealth Management, for "enticing" clients away from the firm. AMP had intitially wanted $4.3 million as compensation for breaching a non-compete clause and fiduciary duties when Ms Manning called around 80 clients after she resigned from Arrive in January 2004. Last year an Australian judge found in Ms Manning's favour for the bulk of the case, but said calls to her clients could not be described as "courtesy calls" but were "enticement pure and simple" and a breach of her fiduciary duties. But the judge said that Arrive had done nothing to keep its clients for several weeks after Ms Manning's departure and had not appointed a replacement. Arrive advisors were told to be "evasive" if asked where Ms Manning was and to reassure clients they would be looked after. The wealth manager did nothing to retain clients as they mistakenly thought Ms Manning was subject to a 12-month restraint of trade clause in her contract, the judge said. Since Ms Manning's departure Arrive’s annual revenue has fallen $1.6 million, according to the company, which calculates a capital value on the lost revenue of $4.3 million. It was impossible for Arrive to assess a capital value on its lost clients as they would have left even if Ms Manning had not breached her fiduciary duties, according to the judge.