The Protocol Afterlife – It’s All About Preparation and Execution
Moorestown, NJ – As a young producer back in 1999, I successfully moved 90% of my clients from Prudential Securities to Smith Barney without violating any rules or regulations. Now, fast forward to 2004 when protocol came into play. It might seem as though leaving protocol would create roadblocks to advisors looking to move from one firm to another, but that is simply not the case. I have recruited advisors prior to broker-protocol and post broker-protocol, and not much has changed. Whether you are considering leaving a non-protocol or a protocol firm, the move can be successful if you are strategic throughout the process and follow a few key steps.
It’s important that you know the rules and follow them when leaving a non-protocol firm. One important consideration is what you can and cannot say to clients prior to making the move. This can cover everything from whether the client is happy with the firm and its pricing structure, whether you feel the current firm is hampering your professional growth and ability to service your clients, or whether or not you or client feel the firm is trying to direct or control the client relationship, as well as whether you can give the client your contact information or provide them with instructions on how to handle the situation when they call your office and you have moved on to a new position.
The other key consideration is your resignation and the move itself. Prior to your departure, under no circumstances should you modify or edit client accounts or files. You will not be able to take any client documents with you, so be prepared to begin making calls to your clients as soon as you leave your prior position to alert them to your choice of a new firm. If a client wishes to move with you, they can request that directly, and send a letter or paperwork to your old firm requesting the appropriate transfers. There is no temporary restraining order (TRO) that would ever prevent a client from moving their accounts to any other firm of their choosing, with your or without you. Finally, keep the resignation itself short, sweet, and without elaboration.
One final piece of advice for consideration – in November of last year Morgan Stanley chose to leave protocol completely to impose greater restraints on advisors considering the jump to another firm – a move which was quickly duplicated in January of this year by Citi and UBS. Morgan Stanley, in particular, has levied the threat of TROs against advisors choosing to move to another firm and subsequently contacting former clients. The fact is, these restraining orders hold no water if the clients are already speaking with you by the time the TRO is authorized, and should not deter you from making a move. Not only have they been soundly defeated in court, such as the case a few weeks ago where former Morgan brokers now with Ameriprise won a court battle with Morgan when a judge denied requests for temporary restraining orders against their practice, but this extreme reaction on the part of Morgan and other firms shows their true colors when it comes to the handling of advisor-client relationships.
In the end, be bold in your decision to make a firm transition. Follow the appropriate procedures and regulations and you can be confident that no firm, no matter how large or how scary their insinuated threat, can prevent you from making a move to a new firm that benefits your business and benefits your customer.
For more information on Elite Consulting Partners, their complete suite of services, most recent moves, or strategic advice that can help you, visit www.eliteconsultingpartners.com.
