In 2004, Citigroup, Merrill Lynch and USB developed the Protocol for Broker Recruiting (the \u201cProtocol\u201d) to protect client information while giving clients an opportunity to more easily transition their accounts from one brokerage company to another when their financial advisors left one brokerage house for another.\u00a0 If a financial advisor decides to move from one company that has signed the Protocol to another, neither the transitioning advisor nor the advisor\u2019s new company will be liable for any damages, as long as the procedure spelled out in the Protocol is followed. \u00a0As of October 13, 2010, 586 companies had signed the Protocol.<\/p>\n
When a financial advisor is deciding to move from one company to another, the advisor should consider whether both companies are signatories to the Protocol. \u00a0If the advisor\u2019s current and prospective employers are both signatories to the Protocol, the advisor need only to comply with its terms to avoid being sued by his former employer for issues relating to the transition.\u00a0 This result holds even where the advisor has signed a non-compete with his or her former employer, as the Protocol prevents signatories to it enforcing non-competes against brokers who move between signatory firms. \u00a0If an advisor wants to leave a firm that has signed the Protocol to become an independent advisor, the advisor can join the Protocol to enjoy its protections. \u00a0However, if either the former or new employer of the advisor is not a signatory to the Protocol, any non-compete agreements signed by the advisor would remain binding and in effect.<\/p>\n
Should an advisor\u2019s current and new employer both be signatories to the Protocol, certain steps should be taken by the advisor to ensure compliance with the Protocol. \u00a0First, the advisor should resign in writing to his branch manager. \u00a0With the written resignation, the advisor should provide a list of all his clients as well as client account numbers. \u00a0The advisor is not allowed to bring this list with him.\u00a0 Additionally, and possibly most importantly, the advisor should not solicit his current employer\u2019s clients or employees before he tenders his written resignation.\u00a0 However, regardless of any restrictive covenants to the contrary, the advisor may take certain client information including the name, address, phone number, e-mail address and account name of each client he serviced.<\/p>\n
Making use of the Protocol is an effective way for a financial advisor to transfer his business to a new company and avoid litigation.\u00a0 In the event you would like to know more about the Protocol and how to ensure compliance with it, please contact Berman Fink Van Horn P.C.<\/p>\n","protected":false},"excerpt":{"rendered":"
In 2004, Citigroup, Merrill Lynch and USB developed the Protocol for Broker Recruiting (the \u201cProtocol\u201d) to protect client information while giving clients an opportunity to more easily transition their accounts from one brokerage company to another when their financial advisors left one brokerage house for another.\u00a0 If a financial advisor decides to move from one […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[25,58],"acf":[],"yoast_head":"\n