No doubt the headlines exclaiming that UBS pulled out of the Protocol for Broker Recruiting (AKA the Protocol) have reached you by now. This news comes with little surprise and we fully expect that Merrill Lynch will soon follow suit. Certainly announcements like this cause an abundance of emotions from fear and anxiety to anger and everywhere in between for advisors who were protected by the seminal document.

There are some realities that every advisor should be aware of, before allowing your emotions to get the best of you.

1. Once Morgan Stanley left the Protocol, we fully expected others to follow. Much like retrenchment in recruiting deals, one typically starts the wheels turning and the others provide the momentum.
2. The rest of the industry, including Morgan and UBS, will have to figure out their stance on recruiting non-Protocol advisors. This process remains to be seen, although we know of many firms that see this as a genuine opportunity.
3. For any firm that is not part of the Protocol, we go back to the days where post-employment restrictions described in an advisor’s employment agreement governed what an advisor can do in the case of a move.
4. Most advisors will have a non-solicit provision. So, just like pre-2004 when Protocol was first launched, advisors and their attorneys will come up with a strategy regarding an advisor’s ability to move and port clients.
5. Non-solicit provisions do not necessarily mean an advisor will be sued. The process that an advisor follows when he is changing firms will be different than when under Protocol protection, but the message is still loud and clear: CLIENT CHOICE IS PARAMOUNT AND ADVISORS ARE NOT STUCK. If they want to move they can, they just need to be educated on how to do so strategically.

This change, while disruptive, signals that we’ve gone full circle—back to the days before the Protocol existed. Advisors will still change jerseys and many more will change models. Unfortunately, as firms make decisions such as this, it sends negative signals out to their advisors—signals that many will see as an expansion of the bureaucracy that is working towards hindering them instead of towards allowing them to grow.

The reality is that whether you’re planning on making a move or not, this really is a big deal. It’s yet another move towards what seems to be the ever-increasing marginalization of the advisor. And every time that happens, one’s value is diminished.

As we witness the evolution of the wealth management industry, one thing is certain: There is a new world order emerging. Business models and advisors will adapt and thrive just as they have up to now. The remains of the day, however, are yet to be seen.

This article also appeared on FA-Mag.com.