Ameriprise Financial has signed up more than 2,000 financial advisers since 2011, and the Minneapolis-based company routinely brags about its ability to lure experienced salespeople in its quarterly earnings statements.
Allstate Insurance, in a federal lawsuit, claims those recruitment efforts go way beyond the normal poaching that takes place in the business world. The Illinois insurance giant claims Ameriprise is “actively encouraging and incentivizing” Allstate agents to “steal” confidential client information before they leave and then use that information to help Ameriprise capture its competitor’s business.
“Ameriprise’s actions have been so blatant and outrageous that Ameriprise has encouraged [salespeople] to lie to [Allstate] about their theft of … confidential information,” Allstate claims in the lawsuit filed earlier this year.
In a recent court filing, Ameriprise denied the allegations, claiming that many of the confidential documents identified by Allstate are readily available to “anyone with a computer, car or phone or access to the court.”
Amerprise declined to say how many of the 2,000 advisers it’s hired since 2011 were recruited from Allstate.
“Ameriprise Financial has an excellent track record of attracting experienced financial advisers to the firm from all across our industry,” Ameriprise spokeswoman Kathleen McClung said in a written statement. “Advisors see value in our strong reputation, great technology, financial strength, and the ability to provide an outstanding client experience and serve the full breadth of clients’ financial needs.”
The companies are both leaders in financial services. Allstate, with about 12,000 agents, sells insurance to 16 million households in the U.S. The company earned $1.8 billion on revenue of $36.5 billion last year. Ameriprise, with just under 10,000 financial advisers, has about 2 million clients. The company earned $1.3 billion on revenue of $11.7 billion in 2016.
In the lawsuit, Allstate claims that Ameriprise is soliciting its salespeople “on a national scale.” Allstate declined to say how many of its agents have been recruited by Ameriprise, but the company said in the lawsuit that it has documented the solicitation of its agents in Arizona, Illinois, Kansas, Louisiana, Nevada and New Jersey. Allstate claims such efforts also are taking place in other states.
Allstate claims that agents who defect to Ameriprise have earned hundreds of thousands of dollars through signing bonuses, which were calculated using purloined revenue figures contained in confidential sales documents, according to the lawsuit.
In an affidavit filed with the court this month, an Allstate agent in Northbrook, Ill., said he was contacted on multiple occasions by Sean George, whom Ameriprise has identified as one of its three national directors of recruiting.
Henry Schmidt, an Allstate agent since 2003, said George spent 10 months trying to persuade him to come to Ameriprise, including several phone calls and two face-to-face meetings in Northbrook.
“As part of our conversations, Mr. George represented to me that in order for Ameriprise to provide me with a ‘firm’ compensation offer, Ameriprise would need to see my confidential production reports for the past three years,” Schmidt said in the affidavit.
Allstate said such reports include an agent’s business volume, the types of products sold and the names of customers — all of which is considered confidential by the company.
Schmidt, who still works at Allstate, said he refused the request. He said Ameriprise was not deterred and has continued to contact him every two months in an effort to persuade him to jump ship.
Allstate said Ameriprise had better luck with two of its agents in Arizona, who left in March with more than 18,000 pages of confidential material, including detailed customer lists, according to the lawsuit. Allstate claims Ameriprise directed those agents to “lie” about their “theft” when confronted by Allstate.
In its filing, Ameriprise denied asking any Allstate agents to steal confidential documents or to lie about the removal of any company documents.
Allstate also claims that Ameriprise has persuaded defectors to provide its competitor with some of the company’s “most sensitive” information, including commission structures, incentive programs, sales quotas and other confidential information contained in a supplement to the company’s standard agent agreement. Allstate said Ameriprise is using the supplement in its recruitment campaign.
In its answer to the lawsuit, Ameriprise acknowledged receiving a copy of the supplement, but it maintains the document is “publicly available” and that the company “did not know the full substance of the supplement” before receiving it.
“With regard to the litigation brought by Allstate, we believe it’s without merit and are defending ourselves vigorously,” McClung said in the statement.