Morgan Stanley Drops Out of the Protocol for Broker Recruiting

Posted on November 3rd, 2017 at 3:24 PM
 Morgan Stanley Drops Out of the Protocol for Broker Recruiting

From the Desk of Jim Eccleston at Eccleston Law LLC:

Morgan Stanley has announced that it has pulled out of the Protocol for Broker Recruiting (“Protocol”) and thereafter any broker moving to another firm will be subject to its one-year non-solicitation agreement. Morgan Stanley sent a blast email to all brokers on October 29th. It is unclear whether other major firms will follow the lead of Morgan Stanley but most likely they will do so.

Over a decade ago, many firms, including Morgan Stanley, agreed to follow the Protocol in an attempt to reduce litigation costs created by attempts to prevent brokers from calling their former customers. The Protocol allows brokers to take with them only customer names, addresses, phone numbers, emails and account titles when they transition to other firms.

However, in recent years, the Protocol has not served a useful purpose for larger firms because more than 1,600 small broker-dealers and registered investment advisory firms have become signatories, allowing them to recruit from the bigger firms without fear of litigation.

In a statement from Morgan Stanley, it justified its move away from the Protocol by underscoring a commitment to spend money on retaining experienced advisors and training new ones rather than hiring them from rivals under the Protocol.

The attorneys at Eccleston Law assist reps transition, negotiate their transition agreements, and defend reps when firms file suit.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial advisors including Broker Litigation & ArbitrationStrategic Consulting ServicesRegulatory  MattersTransition Contract Review, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: Jim Eccleston, Eccleston Law, Eccleston Law LLC, Eccleston, Morgan Stanley

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