Wirehouse Clients, yours or theirs?

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Mac42's picture
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I am currently interviewing with ML, SB, MS, &AGE. The AGE branch and regional managers continue to caution me about the bigger firms and their contracts that deal with client information ownership.
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Between ML, SB, & MS, who has the most strict legal language around “owning your book” if you leave the firm?
 
I ask this question not because I am planning on going to a firm and leaving in 2 years, but because I have interest in going Indy in 10 to 15 years.

JCadieux's picture
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Joined: 2005-01-23

All of the wirehouses that you mention have equally binding contracts.  They have good lawyers, and they write the strongest contracts that they can under current law to protect their interests.I'm not sure if any of them are more or less likely to pursue you if you violate your agreement while going indy.  I'll let somebody else address that.By speaking to an attorney or your firm's transition people, you will probably find that your state law and case histories will support certain "fair" activities that are not addressed in your non-compete.  For example, in many cases it is acceptable to send a "Graveyard letter" to past clients announcing your new employment status.  Depending on your location, this may not be considered a "solicitation".So the answer is:  it's all the same.  The firms make things as strong as possible, but the law protects you (the employee) equally at all firms.  Think of it as different boats in a harbor.  The water level is the same on all boats.Banks and brokerages are regulated by different sets of laws in this matter, so this answer does not apply if you work in a bank channel.Also, things are different in firms with non-wirehouse client management models.  For example, it is more difficult to move a book from a firm where one department sources customers and another manages the long-term relationship.I don't want to get off on a rant here, but:  Once again, I am not a lawyer.  Seek professional help.  Free advice is worth what you pay for it.  Your mileage may vary.  Never believe anything you read on the Internet.  This is just my opinion, I could be wrong.Good hunting.

NASD Newbie's picture
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Add that the original statement talks about leaving in many years--by then many non-competes have lapsed and the advisor should be in a far better position to have laid the ground work to have his clients clamoring to move with him.

vbrainy's picture
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Mac42 wrote:
I am currently interviewing with ML, SB, MS, &AGE. The AGE branch and regional managers continue to caution me about the bigger firms and their contracts that deal with client information ownership.
<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 
Between ML, SB, & MS, who has the most strict legal language around “owning your book” if you leave the firm?

I ask this question not because I am planning on going to a firm and leaving in 2 years, but because I have interest in going Indy in 10 to 15 years.

Forget that at ML.  Wachovia and Raymond James will tell you ON PAPER that you own your book.

Greenbacks's picture
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Joined: 2004-12-21

vbrainy wrote:Mac42 wrote:
I am currently interviewing with ML, SB, MS, &AGE. The AGE branch and regional managers continue to caution me about the bigger firms and their contracts that deal with client information ownership.
<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 
Between ML, SB, & MS, who has the most strict legal language around “owning your book” if you leave the firm?

I ask this question not because I am planning on going to a firm and leaving in 2 years, but because I have interest in going Indy in 10 to 15 years.

Forget that at ML.  Wachovia and Raymond James will tell you ON PAPER that you own your book.

You would believe some thing a wirehouse would tell you?  

Mac42's picture
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Joined: 2006-06-14

NASD Newbie wrote:Add that the original statement talks about leaving in many years--by then many non-competes have lapsed and the advisor should be in a far better position to have laid the ground work to have his clients clamoring to move with him.
If the non-competes laps, how long do the agreements generally last?

NASD Newbie's picture
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Read it caefully--if you can't understand it take it to a lawyer.
Just about everybody who has said anything has said that you don't have to be too concerned about it--most firms (because of state laws dealing with freedom of association and involuntary servitude traditions) will allow you to notify all of your clients via a letter that tells them you're leaving Acme Securities for Ajax Securities.  You can include your phone number.
People who like you will call you at your new number.  If somebody doesn't they either dont love you as much as you thought or maybe they just procrastinate.
Now Compliance Clerk will whine that you better not call them, because if you do functionaries like him will get all agitated.
How about this.  "Oh I'm sorry Mr. Johnson, this is Bobby Broker, I made a mistake and touched the wrong number on my speed dial."
Mr Johnson is going to say, "You have me on your speed dial?"
Great chance to continue talking.
If he seems unreceptive hang up and figure he's either not going to call you or he and his wife were fooling around when you called.
What you have to "worry" about is some former client tells their new broker at your old employer, "Guess what, Bobby Broker, phoned me."
Most people are not going to do that, especially if you fake it as a mistake.
Take it to another level.  Suppose your old firm hears that you called your clients.  In order to do that they have to get all embroiled in the legal system--that is not cheap.  Firms are not eager to spend money needlessly so unless you're actually calling clients of other brokers at your former employer it is unlikely that you'll even get a lawyer letter, much less a followup.  It's just not worth it.
In order to make their case they're going to have to get clients to provide depositions and interrogetories--and how impressive is that to a client.  Big bad Merrill Lynch is trying to sue a former broker for talking to his former clients?
What if the media got ahold of that?
Hell, the firms will give away tens of thousands of dollars to make modestly vaild customer complaints go away because it's cheaper than defending themselves--why in the world would they spend a lot of money going after a broker.
Not to say it doesn't happen--but it's about as frequently as we're visited by Haley's Comet.
Compliance Clerk will come along and whine.  Envision me telling him to shut up and sit down, I'll run the risk.
And him saying, "Yes sir, I just want to make sure you know...."

compliancejerk's picture
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Joined: 2004-12-03

old fart is full of gas .... still
it's the TRO you have to worry about more than the non-competes (not to say you shouldn't worry about them).
TRO get slapped down very quickly.  The non-competes come afterwords. Most larger BDs have law firms on retainers to do all the dirty work.  Some firms go after the small fry brokers (hand and foot) in order to scare the bigger producers.  As far as not using the legal system newbie couldn't be more wrong, getting a TRO is the cheapest and fast way for a BD to "buy-time"  the media knows about this and could care less .... BD suing broker not if there is some info Tom Cruise???
You're better off to put an add in the local paper announcing where you are now located.  One or two errounious calls to clients is okay but 30-40 pretty tough to explain.  If you have them on your speed dial it will even be tougher to believe.
If you work a small firm that doesn't require all pro-accounts to "in-house" well then newbie's statements will probably hold true.
Usualy within the first 30 minutes after your resignation is received by the Branch Manager the accounts are already divided up amongst your branch. By the end of the first day your clients will have been told one story or another about your reason for leaving (mostly negative).
Having said all this, I suggest you talk to a lawyer BEFORE contempleting a jump. Better yet get one other than the legal council at the firm you are jumping to.
But then just cuz I've been in Compliance for the last 12 years I only know how to compare signatures.

bankfa10's picture
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Joined: 2006-02-21

I thought that firms can no longer can get TRO's on reps just to stop the TOA process and that if taken to court that the doctrine of unclean hands rulings have been very favorable to RR's whose firms sue for taking clients etc

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compliancejerk wrote:
But then just cuz I've been in Compliance for the last 12 years I only know how to compare signatures.

Now clerk boy don't get all in an uproar.  What I said was you spend your day ensuring that there is a signature on each form---you wouldn't be bright enough to compare signatures.  Just see one is all you need.
There is a world of difference between what those of your ilk think goes on and what actually goes on.
If I was recruiting one of your boys or girls I would contact their large customers and explain to the customer that I was contemplating hiring Bob Broker and that Bob had mentioned them as a client.  Typical call to verify a reference.  Then as part of that conversation I'd mention that he was probably going to get a call from a broker at his current firm, and that that caller may try to paint Bob in a negative light.
As I said several weeks ago when the manager who hired me at a top six brokerage firm was offered a job at a different top six brokerage firm he asked me, among others, to go with him.  Every one of my accounts was transferred from Firm A to Firm B by another broker.
Here's how it happened.  My manager resigned on a Friday. On Monday, at our new firm he turned in all of our account transfer forms--they were sent in the overnight pouch, this was pre-Fed Ex but the airlines had a service that took things to New York overnight.
Anyway, on Tuesday, Wednesday, and Thursday six of us were going though the motions at Firm A while our regional manager kept assuring us that he would find a new manager.
On Friday the schidt hit the fan--somebody in New York called the regional manager and told him that hundreds of accounts were being transferred out of the branch--they figured out which of us were leaving.  We were ordered off the premises immediately.
Over the years I've seen dozens of people move--only an incompetent runs any real risk of losing accounts to the negative comments.  What kind of a relationship would you have with a client if you did not tell them IN ADVANCE that you were going to leave and you hope they'll come too.
Slap me with a TRO after I've left--who cares, the key clients have already signed the ACAT and were told that it was going to be dated a few days later.
There is a world of difference between the real world and the world of the compliance officer.
Tell us clerk, where did you get your law degree?  Actually to be a compliance clerk only requires a high school diploma so perhaps you don't have any degree at all.
Are you one of those toy compliance officers, say in a UBS branch somewhere, or do you work with real compliance officers in a home office?

compliancejerk's picture
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Joined: 2004-12-03

PRE FedEX??????
Is that your "latest" example ????? A Burroughs machine must have been "high tech" no wonder all you stories are so dated..... you really are a pathetic lonely man who has nothing better than to have made nearly 50 posts in the last 24 hours and over 1100 in the last year.
Your antics may have worked when the fax machine was invented but unfortunately you still think it's 1980.
Since you wouldn't state at which little firm you work (or have worked at) neither will I.  But like I said before no major firm will permit any "pro" to have accounts at other firm's due to supervision concerns.... but then you're above that (or not in the industry since you have so much play time) 
 

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compliancejerk wrote:
Since you wouldn't state at which little firm you work (or have worked at) neither will I.  But like I said before no major firm will permit any "pro" to have accounts at other firm's due to supervision concerns.... but then you're above that (or not in the industry since you have so much play time) 

How about for a Senior Vice President who had announced his retirement?
Would they let a guy like that open an account at Fidelity?

Mac42's picture
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Don't we all have better things to do than argue on a message board?

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Mac42 wrote:Don't we all have better things to do than argue on a message board?
Not me--unless GOOG is running.  Is it a rule that you have to be busy all the time?

compliancejerk's picture
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NASD Newbie wrote:compliancejerk wrote:
Since you wouldn't state at which little firm you work (or have worked at) neither will I.  But like I said before no major firm will permit any "pro" to have accounts at other firm's due to supervision concerns.... but then you're above that (or not in the industry since you have so much play time) 

How about for a Senior Vice President who had announced his retirement?
Would they let a guy like that open an account at Fidelity?

sr. vp of what or just for production?
If production, have a look at just how many peers you have.
otherwise I'd say lax supervision and/or they just wanted you out door as quickly and quietly as possible.

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compliancejerk wrote:
sr. vp of what or just for production?
If production, have a look at just how many peers you have.
otherwise I'd say lax supervision and/or they just wanted you out door as quickly and quietly as possible.

Nope, not production or investments--I was a "real" SVP reporting to an EVP who reported to the CEO.
So, do you suppose I would have been told that I could not have an account at Fidelity--especially since it was known I would be leaving on my anniversary?
How about you?  You're a compliance clerk, but in a branch or in an ops center somewhere or at the home office?  How much education do you have?  Have you completed the Securities Industry Insitute program at Wharton?  Just what do you bring to the table?

compliancejerk's picture
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oh goody for you. a "real SVP" but no mention of what sort of education or what the progression was to your level.... perhaps they brought you in house to keep you out of trouble...it's winder with your arrogance.
every time you make a claim you leave so much information out and fill in the blanks afterwards. If you act the way you do on this forum then I too would give approval if it meant getting your arrogant backside out quicker/faster not to mention quieter.
21 years with BDs. from sales assistant to broker to branch manager and into HO Compliance to dept manager. Yes to Wharton course. I have an engineering degree and a masters in Economics.
 

NASD Newbie's picture
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compliancejerk wrote:
oh goody for you. a "real SVP" but no mention of what sort of education or what the progression was to your level.... perhaps they brought you in house to keep you out of trouble...it's winder with your arrogance.
every time you make a claim you leave so much information out and fill in the blanks afterwards. If you act the way you do on this forum then I too would give approval if it meant getting your arrogant backside out quicker/faster not to mention quieter.
21 years with BDs. from sales assistant to broker to branch manager and into HO Compliance to dept manager. Yes to Wharton course. I have an engineering degree and a masters in Economics.

You moved from sales assistant to branch manager?  That's a hell of a jump---what was the head count in the branch?
Also what an odd route to go from branch manager to HO compliance--I've never heard of that before.
Finally being a Compliance Department manager is unheard of without a law degree.
What an unbelievable journey you've had.
BTW, when did you do Wharton?  What did you find to be the most interesting part of the program?

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Clerk, are you a boy or a girl?

compliancejerk's picture
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re-read the post you arrogant windbag
you skipped the broker part.  Branch had 20. So now it's if you haven't heard of something it must not be true. as for the jump I had personal reasons for the jump.....
Compliance has several departments and I'm the head of one.
what do you think I'd like the most ..... Compliance.
Thanks for the back and forth communications but you've got me to do something I vowed not to.  Loose precious time posting with an arrogant windbag that has lost contact with the field.  Your arrogance egged me.
but no more. get a life try to get back with your family as you spend WAY too much on this forum.

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I promised that I would not point out typos--just when the wrong word is used.
Loose is an adjective meaning not tight.
The word lose is used to mean the loss of something.
I hope I don't lose my courage to drive the car since the wheel seems loose to me.
 
Before you go tell me what you enjoyed the most about the Wharton program?

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