Perpetual sued to stop clients moving after Ord Minnett raid. It lost David Marin-GuzmanWorkplace correspondent Apr 17, 2025
Perpetual has failed to get injunctions to stop seven senior advisers from soliciting its high-net-worth clients after staff raids by rival Ord Minnett, as court rulings reveal the wealth adviser fears almost 250 clients are at risk.Supreme Courts in Victoria and Queensland have found Perpetual’s case to enforce its “extremely broad” non-solicitation clause – which would have stopped clients from transferring to Ord Minnett – was weak and held it was not in the public interest to restrict clients’ freedom of choice.Perpetual argued clients’ ability to terminate their relationship “at will” made the restraint necessary.
Brendan EspositoThe rulings handed down this month reveal that since Ord Minnett’s poaching of Perpetual’s wealth management division late last year, Perpetual has lost 22 clients – and those were from just one senior adviser’s client list.Collectively, the seven advisers had managed 247 clients, and Perpetual argued that if they dealt with its remaining clients, there would be a “significant risk” to its business.But Queensland Supreme Court Chief Justice Helen Bowskill said it was “a matter of serious concern” to make an order that would “restrict the choice of clients to have their personal financial matters looked after by a person they trust and, in some cases, have worked with for a number of years”.
Indeed, it has been observed that a restraint which restricts choices available to customers of services may be unreasonable in the public interest,” she said.Victorian Associate Justice Mary-Jane Ierodiaconou, dealing with six advisers in Victoria, backed the Queensland analysis as “plainly correct” and said “the public interest issue is the clients’ choice of service provider”.
The rulings were handed down as the Albanese government has committed to ban non-compete clauses for workers earning a base salary of up to $175,000 – excluding commissions or shares – and has promised to consider further measures for non-solicitation clauses and higher-income workers.Ord Minnett poached the advisers in November to start work in March as part of a hiring spree to boost its ranks. They included Andrew Epplett, Mark Heffernan, Daniel Swallow, Oscar Howard, Malissa Tobias, Shiva Vemula and Con Magis.
The raids came as Perpetual negotiated a $2.2 billion deal to sell its wealth and corporate trustee arms to private equity firm Kohlberg Kravis Roberts. The firm killed off the deal earlier this year.
On March 31, Perpetual sought injunctions to enforce contractual clauses that restrained the advisers from dealing, or even accepting approaches, from any client they had worked or had contact with in the past 12 months.The contract sought to extend the prohibition to clients the advisers had just had social contact with or engaged in non-commercial transactions.Perpetual claimed the advisers breached non-solicitation clauses by sending draft letters to clients who approached them. The letters allegedly gave detailed instructions on how clients could leave Perpetual and included another letter clients could send to permit transfer to Ord Minnett.
“By deploying the letters, the defendants must have appreciated Perpetual would have to action them regardless of any restraint,” the firm argued.Perpetual argued that its clients’ ability to terminate their relationship with Perpetual “at will” made the restraint necessary and justifiable.“Although the restraint would restrict clients’ freedom of choice, that is the result of every non-solicitation clause,” it told the court.Ierodiaconou accepted that the exchange of letters with clients could be construed as “dealing with clients”. But she held it was a weak case to issue an injunction that would restrict clients’ choices.She held that the “lower risk of injustice is not to grant the injunction”.
A Perpetual spokesman argued the firm’s post-employment restraints were “commonplace in professional services and financial advisory businesses”.“The recent decisions of the courts related to applications for interim relief only. These matters are still before the courts and no final judgment has been made.”
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