HighTower Advisors to Exit Broker Protocol

Posted on May 14th, 2019 at 4:02 PM
HighTower Advisors to Exit Broker Protocol

From the Desk of Jim Eccleston at Eccleston Law LLC:

HighTower Advisors has announced that the $50 billion RIA will exit the Broker Protocol. HighTower’s exit follows the departure of Morgan Stanley and then UBS in late 2017.

Over a decade ago, many firms, including Merrill Lynch, Morgan Stanley, and UBS, agreed to follow the Protocol in an attempt to reduce litigation costs related to preventing brokers from soliciting and doing business with their former customers. The Protocol allows brokers to take with them customer names, addresses, phone numbers, emails and account titles when they transition to other firms, and to solicit them without restriction.

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

Nevertheless, Raymond James, Merrill Lynch, and Wells Fargo have said that they will remain in the protocol for now, asserting that it was beneficial for both advisors and their clients.

HighTower certainly has benefited from being a member of the Protocol. Now, with $50 million in assets, it has decided to steer away from the business of recruiting breakaway brokers. Instead, HighTower plans on focusing its attention on acquiring RIA firms.

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 FraudCompliance ProtectionBreach of Fiduciary DutyFINRA 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

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, hightower advisors, merrill lynch, morgan stanley, ubs, raymond james, broker protocol

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Thank you for your professional assistance with this matter. You are very good at what you do.

John T.


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