Genesys Wealth Advisers (Genesys) has commenced legal action against former employee Ray Miles after he began soliciting Genesys member firms to join his proposed new dealer group.
Miles, a former managing director with Genesys has spoken with up to five of Genesys’ existing member firms.
The firms are among the group’s top earners, the New South Wales Supreme Court heard last week.
Genesys is seeking legal restraint against Miles to stop him developing his new dealer group and cease his solicitation of Genesys member firms.
Genesys claims that Miles is in breach of both his employment contract with the company and the company’s confidentiality agreement.
Legal representatives for Miles confirmed he did intend to establish a new dealer group, but that their client had informed Challenger Financial Services chief Greg Kirk of his intention to embark on a new business venture at the conclusion of his employment.
Miles’ legal team also claimed there was a faction among Genesys member firms, with many considering withdrawal from the dealer group due to dissatisfaction.
According to Miles’ affidavit filed in court, Miles had a conversation with his successor regarding the status of the business.
As part of the conversation, Miles’ successor said: “It is like mice on a treadmill . we are losing member firms more quickly than we can put them on.”
In November last year, Genesys suffered a blow when a number of key adviser and member groups quit the dealership after their shares in Challenger were released from escrow on August 22.
Last week, Challenger Financial Services sold its financial planning division to Axa.
The sale included Genesys Wealth Advisers and adviser platform, Synergy Capital Management.
Genesys and Miles will return to court later this month.
