According to Industry for Broker Recruiting, Merrill Lynch and Wells Fargo Advisors Likely to Exit the Protocol
From the Desk of Jim Eccleston at Eccleston Law LLC:
Merrill Lynch last year declared its intention to stay in the Protocol for Broker Recruiting even after both Morgan Stanley and UBS had withdrawn from the Protocol. However, that may change. There is now speculation that Merrill Lynch will leave the Protocol and that Wells Fargo likely will follow.
Over a decade ago, many firms, including Merrill Lynch and Wells Fargo agreed to follow the Protocol in an attempt to reduce litigation costs associated with preventing brokers from soliciting and doing business with their former customers. The Protocol allows brokers to solicit customers and take customer names, addresses, phone numbers, emails and account titles when they transition to other firms.
Nevertheless, in recent years, the Protocol has not served a useful purpose for wirehouses like Merrill Lynch and Wells Fargo because more than 1,600 smaller and independent broker-dealers, as well as registered investment advisory firms, have become signatories, thereby allowing them to recruit from the bigger firms without fear of litigation.
The tactics of Morgan Stanley and UBS appear to have slowed broker exists during the first three months of 2018. Moreover, according to InvestmentNews, overall there has been a decline of almost 44% this year in advisor moves.
Brokers still will transition. But in the new, Non-Protocol world, is imperative that advisors proceed cautiously and take the necessary steps when transitioning to another firm, in order to reduce the chance of litigation.
The attorneys at Eccleston Law assist financial advisors in their employment transitions, negotiate their transition agreements (including employment agreements and forgivable loans) and defend reps in arbitration and litigation, whether or not their firms are members of the Protocol.
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 investors and advisors including Securities Fraud, Compliance Protection, Breach of Fiduciary Duty, FINRA Matters, 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
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