But perhaps the most important step of all is to simply check the existing work agreement with the broker – this document that covers everything from compensation and commitment bonuses to crucial uncompetitive and unsolict conditions. Although the broker protocol makes sense is to effectively repeal the unsolicted terms of the existing employment contract, this applies only to non-soliciting conditions (and usually only for clients that the broker himself has brought/developed). The rest of the employment contract is still in force and has yet to be respected. Such companies, such as RIAs, can use their adherence to the protocol to attract consultants who wish to participate in a company that has protections if they try to follow suit. MatasarJacobs (transition to another broker dealer) Also remember that the previous company can start immediately after your departure and will almost certainly immediately start contacting your (former) clients and asking them to stay. While the brokerage protocol allows the outgoing broker to take certain customer information to ask customers to change, it does nothing to prevent the previous company from also contacting these customers and asking them to work with a new broker with the existing company. And of course, the inevitable reality is that the company will know exactly who these customers are, since the list must be provided at the same time as the broker`s resignation letter. In particular, the requirement to provide the outgoing company with a list of receivables also provides a list of specific customers and related accounts that the company may request to keep its customers, which is not necessarily advantageous for the outgoing broker. However, the broker`s recruitment protocol requires that this list of account numbers be made available to the outgoing company and that the broker does not entail these account numbers in his new business (since account numbers are not protected by the brokerage protocol, only names, contact information and account titles). The brokerage protocol has been the way forward for industry to deal with litigation and customer data protection issues. Merrill Lynch, UBS PaineWebber and Smith Barney were the founding members of the agreement, the Protocol for Broker Recruitment, in 2004.

In 2006, Morgan Stanley and Wachovia Securities (now Wells Fargo Advisors), the remaining wire-making home companies, followed. The brokerage protocol was born as a form of “treasure” between large broker-dealers, who systematically ended up in disputes with other broker-dealers when a broker changed companies. Before the broker`s minutes, it was common for brokers to announce their departure in the final minutes of a Friday afternoon, then spend the weekend contacting and transforming as many clients as possible into their new business. At the same time, lawyers for the previous broker-dealer would try to find a weekend judge with whom they could file a temporary relief injunction (TRO) against the outgoing broker to stop him from recruiting clients, followed the following Monday by a more substantial injunction to prevent the broker from continuing to enter a new business. And after that, the broker-dealer would probably trigger a dispute against the outgoing broker for a breach of the employment contract (violation of unsolicted or non-competitive terms). “The consultant has the connections and, from our point of view, there will be a new migration to independence,” said Robert Moore, CEO of Cetera Financial Group Inc., a large network of independent brokers. “In companies that come out of the protocol, we see no impeddle to us having good consultants and providing them with better solutions.” In essence, the brokerage protocol is an agreement between participants in the securities industry that regulates the use of client data when consultants move from a company that has signed the brokerage protocol.