Melanie Housden, now an affiliate of Carson Wealth Management Group.
It was no idle legal threat that Edward Jones made, out of the blue, according to financial advisor Melanie J. Housden, who had built a multimillion-dollar business at the firm in the tiny city of Hamilton, Texas — population 3,000 — over 15 years. To be sure, when Housden went independent a year later, Jones made good on its alleged threat and sued her for $3 million, Housden tells ThinkAdvisor in an interview.
A solo advisor since 2015, she is an affiliate partner of Carson Wealth Management Group, in Hamilton.
The award-winning advisor, 51, managed more than $100 million in assets of 300-400 clients when Jones concluded that she was preparing to leave the firm and threatened to "take aggressive legal action" if she did, Housden says.
About two years before going on her own, Housden had conducted research into opportunities elsewhere when she perceived that Jones "wasn't going to be able to provide the services that I thought my clients needed [or] to take care of me as the advisor," she said in a June 2018 interview with InvestmentNews.
What happened down the line after Jones allegedly made its threat were a few rather strange things, Housden says. Her clients suddenly began receiving phone calls about their accounts from people saying they represented Jones. Later, Housden said, she had frightening, unbidden visits from two Jones advisors.
After the firm brought the complaint against her in 2016, Housden filed a counterclaim plus third-party claims against the two advisors.
Then, two years after she exited, Jones dropped its case; and Housden released her counterclaims. She was not required to pay the firm a penny.
However, according to a Jones spokesperson, "Edward Jones did receive payment from firms Ms. Housden became affiliated with after her employment with Edward Jones. All parties released claims against the others, and there was no admission of wrongdoing or liability by any party."
Both Housden and her attorney, David K. Bissinger, declined to comment on Jones' statement regarding payment to firms with which the advisor subsequently affiliated.
In leaving Jones, Housden joined Pinnacle Financial Group and Carson Wealth Management. Pinnacle partnered with Carson and took on the Carson name in 2018.
All's well that's ended well for Housden, perhaps; but between the time of receiving Jones' alleged threat and the conclusion of the acrimonious case, the brokerage gave her rough treatment that included harassment, invasion of privacy and scaring her clients, the FA says.
ThinkAdvisor recently interviewed Housden, on the phone from Hamilton. For the conversation, she used an iPhone with a wireless Bluetooth phone clip connected to the sound processors of her two cochlear implants, which allow her to hear via electric signals. Housden, who lost her hearing at 14, is profoundly deaf. That, obviously, has never stopped her from reaching myriad challenging goals.
Here are excerpts from the interview:
THINKADVISOR: What prompted you to leave Edward Jones after building a big practice there for a decade and a half?
MELANIE HOUSDEN: It all started with the arbitration case of a client I'd inherited when I took over the Edward Jones office in Hamilton in 2004. They waited six years to file a claim to FINRA. I hadn't sold any of the investments, but I was the advisor in that office when they were liquidated; so the claim was filed against me and Edward Jones. I hadn't done anything wrong.
What happened?
FINRA agreed to have the case expunged from my record, and Edward Jones had to file the expungement. However, by 2014, I found that they still hadn't filed it. So I contacted the legal department. I also spoke with FINRA. In about two weeks, it was removed.
So that was that?
No. I received a call from my area leader who said that the legal department had contacted him saying my trying to clear my record indicated that I was going to leave the firm; and he was calling to tell me that if I was going to leave, Edward Jones would take aggressive legal action against me and get HR involved.
Were you in fact preparing to leave?
No, no. Even if I was looking at other firms, that didn't mean I was going to leave. Why would I leave when I had built a successful multimillion-dollar book of business there? I would have to walk out the door without telling any [of my clients] because of my noncompete contract.
How, then, did you react to what the manager said?
I thought: Wow, they threatened me. Why didn't they just say, "We're sorry we didn't take care of this [expungement] like we should have"?
Did the firm follow up on their threat in any way?
I started getting calls from my clients telling me they were receiving weird calls from someone saying they were from Edward Jones who wanted to talk to them about activity in their accounts. It really alarmed them: They were afraid someone was trying to steal their identity.
Why was Jones calling your clients?
They denied they were calling them. But then more clients phoned me saying they were receiving calls from Edward Jones. The clients told them: "I don't know who you are. I talk to Melanie. I don't talk to you about my account."
Did you try to do anything about this?
I called Edward Jones' fraud department, legal department and my area leader. But no one would give me an answer. Then I sent emails to the firm's general partners, head of HR, head of the legal department and my compliance director asking why the firm threatened me and why they were making calls to my clients trying to scare them. No one responded.
What were your thoughts?
