ETF Trends
ETF Trends

By Matt Sonnen via

First, a disclaimer: We are not lawyers, and this post does not contain legal advice of any kind.  As operational consultants that advise financial advisors on the nuances of starting an RIA, we always suggest advisors consult with legal counsel before embarking on a breakaway transition.

The recent news of Morgan Stanley’s and UBS’ exit from the Broker Protocol caused quite a stir in both the wirehouse and RIA industries.

You can see our take on the news here. Many industry leaders believe that other wirehouses will follow suit and exit the Protocol themselves.  Some are questioning if those departures will quell the movement of advisors from the wirehouses to Independence.  While this news has definitely made advisors re-evaluate their commitment to transitioning their business, we believe non-Protocol transitions can be extremely successful, as long as advisors take a few operational issues into account as they plan their departure.

Whether you are planning an exit under the Protocol or not, all aspects of your move prior to your resignation from your wirehouse firm are the same – you cannot notify clients of your intention to move, nor can you solicit employees of the firm to join you.  Protocol or no Protocol, you are still bound by your duty to your employer not to compete.  Once you have resigned from your employer, however, a Protocol vs. Non-Protocol transition will differ substantially.

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