Wirehouses Hunt for Bank Channel Talent

Posted on May 26th, 2014 at 9:00 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Wirehouses are recruiting top advisors from the bank channel. As the broker-dealer industry becomes more competitive, even big firms are becoming much more flexible and open in their recruitment in order to ensure success and meet their aggressive recruiting goals.

The effort historically has been risky. Most bank advisers build their businesses through company referrals rather than prospecting, so clients often are less willing to transfer their assets. Moreover, bank advisers pose legal risk. While most brokerage firms have signed the Protocol for Broker Recruiting, banks have shied away.

Bank of America Merrill Lynch is a member of the protocol, for example, but that does not apply to advisers in its bank channel, Merrill Edge. J.P. Morgan Securities signed on earlier this year, but clarified that it was limited only to the few hundred advisers in its private client group and excluded the JPMorgan Chase Private Bank.

In addition, bank advisors face tighter restrictions on what client information can be taken. Morgan Stanley was sued earlier this year when it recruited a trust adviser from PNC Bank. PNC accused the firm of helping the adviser misappropriate trade secrets. Bank advisers have employment contracts that have non-solicits or non-competes, or event sometimes a garden leave provision of 30, 60, or 90 days. Competent legal counsel, such as Eccleston Law, should be retained to review and consult.

Another concern is that many bank advisers are working with mass- affluent clients with less than $250,000 in assets, while most wirehouse accounts require investible assets of greater than $250,000 for the adviser to receive a payout. Still, wirehouse managers are willing to take on the risk, especially if a successful bank hire can provide a connection to a big-name client.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


Return to Archive



We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele


October 20, 2021
5 First-of-Their-Kind SEC Enforcement Actions Announced

Securities and Exchange Commission (SEC) Enforcement Director Gurbir Grewal recently discussed notable first-of-their-kind enforcement actions that his division has pursued.

October 19, 2021
FINRA Targets SPACs in Most Recent Exam Sweep

The Financial Industry Regulatory Authority (FINRA) has begun an examination sweep of advisors’ involvement with special purpose acquisition companies (SPACs).

October 18, 2021
SEC’s Statement on Complex Exchange-Traded Products

The Securities and Exchange Commission (SEC) recently voted to approve a pair of rule changes proposed by Cboe BZX Exchange, Inc. to list and trade shares of new exchange traded-products: the 2x Long VIX Futures ETC and the -1x Short VIX Futures ETF.