By Andrew Welsch
Last month, Merrill accused Dynasty Financial Partners of reneging on an agreement to arbitrate a dispute stemming from the departure of one of Merrill's biggest financial advisor teams, which launched an independent wealth management firm with backing from Dynasty. Now, Dynasty is firing back, telling a federal court that it can't have reneged on the agreement because it never consented to arbitration in the first place.
The dispute comes almost six months after a group of advisors that oversaw $129 billion in client assets at Merrill left to open OpenArc Corporate Advisory in Atlanta. Merrill promptly sued the advisors, Dynasty, and Charles Schwab, which is providing a trading platform to OpenArc and custodying client assets on behalf of the advisors.
Merrill accused the defendants of a "premeditated corporate raid" and said that they collaborated to divert business from Merrill Lynch to the new firm, according to the company's Sept. 23 complaint filed in a federal court in Atlanta. The defendants denied any wrongdoing. And the advisors filed a motion to compel Merrill to arbitration. Judge Victoria M. Calvert granted that motion and stayed the federal court proceedings pending the outcome of the arbitration.
All the parties involved in the case "agreed that it is important for the present dispute to be before Finra as soon as possible," she wrote in her Oct. 1 order. "The Court agrees and finds that Finra arbitration is the proper forum for this matter."
Finra is the brokerage industry's self-regulatory organization.
Last month, Merrill returned to federal court; it accused Dynasty of reneging on an agreement to arbitrate their dispute and it requested the judge either compel Dynasty to arbitration or allow it to pursue claims against Dynasty in court while it simultaneously proceeds with its arbitration case against the advisor team.
Dynasty's March 12 response asks the judge to reject the request. Merrill is "aware that there is no arbitration agreement between it and Dynasty," Dynasty says in its filing. Dynasty accuses Merrill of "willful misrepresentations" of the October ruling by Judge Calvert, whose order granting the motion to compel arbitration only applied to Merrill and the OpenArc advisors. The company also says that it cannot be compelled to go to Finra arbitration as it isn't a member of Finra.
Dynasty also asks a judge to reject Merrill's proposed alternative remedy of allowing it "limited" discovery, meaning it can request certain documents and information from Dynasty. Granting this request would be unfair to Dynasty and allow Merrill to avoid arbitration rules, Dynasty argues.
A Merrill representative says in a statement: "As our previously filed motion states, we are simply seeking the right to pursue our claims against Dynasty in the appropriate forum."
Dynasty helps advisor teams leave national brokerage firms such as Merrill Lynch to open their own registered investment advisory firms. The St. Petersburg, Fla.-based company also provides RIAs with technology, investment banking services, and a turnkey-asset-management-program, or TAMP.
Write to Andrew Welsch at andrew.welsch@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 17, 2026 17:12 ET (21:12 GMT)
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