One of the most significant concerns advisors have when making a move—particularly those transitioning without the protection of the Broker Protocol—is the fear of legal retribution from their firm.
That is, the dreaded TRO, or temporary restraining order, which can stop their business dead in its tracks.
In 2004, Smith Barney, Merrill Lynch, and UBS created the Protocol for Broker Recruiting Protocol to stave off the common and expensive litigation that occurred when a departing advisor left one firm to join a competitor.
Essentially, these firms and others who opted in (including Morgan Stanley and Wells Fargo) agreed to a “cease-fire” of sorts, permitting advisors to freely leave with a limited amount of client information and actively solicit these clients.
The sense of relief that Protocol bestowed upon transitioning advisors came to a halt in 2017 when Morgan Stanley and UBS opted out. As of this recording, Wells Fargo and Merrill Lynch are still members.
Yet many other firms have never been part of the Protocol: For example, Edward Jones, a firm that has seen its fair share of departing advisors over the last year.
While advisors successfully transition out of non-Protocol firms each and every day, doing so comes with added risks. In this episode, attorney David Gehn, whose expertise is in representing advisors in transition, speaks with Jason Diamond. They answer all these questions and more:
- What do advisors from non-Protocol firms such as Edward Jones, Morgan Stanley, and UBS and Protocol firms alike need to consider when making a move?
- What should advisors be most concerned about?
- What extra steps do advisors from non-Protocol firms need to take to avoid litigation when making a move?
- How do advisors from Edward Jones and the like position themselves for a “successful” transition with the highest level of portability and the lowest level of risk?
Plus, given David’s expertise with advisors from Edward Jones and other non-Protocol firms, he shares first-hand insight on the factors driving advisor movement.
Listen in to glean advice from an attorney experienced in advisor transitions from Protocol and non-Protocol firms alike.
Download a transcript of this episode…
