Mindy Diamond Quoted – By Greg Iacurci, InvestmentNews – Morgan Stanley dropped an industry bombshell this week upon announcing it would leave the broker protocol, a 13-year-old agreement that governs how financial advisers could leave one brokerage firm for another without getting in legal trouble. Mindy Diamond, president and CEO at recruiting firm Diamond Consultants, equates the agreement to a “mutual truce” — advisers who were part of signatory firms could leave without being sued if they followed certain rules, such as only taking a limited amount of client information.
By Mindy Diamond – The announcement of Morgan Stanley’s exit from the Broker Protocol as of November 3rd was just one more reminder that financial advisors are living in uncertain and tumultuous times. It’s become very clear that as an employee, the advisor is not steering the ship.
Mindy Diamond Quoted – By Andrew Welsch, OnWallStreet – Morgan Stanley is exiting the Broker Protocol. But even if threatened with potential lawsuits, advisors will still make career changes, recruiter Mindy Diamond contends. “Plenty of people moved pre-protocol, and they’ll move again,” she says.
Howard Diamond Quoted – By Bruce Kelly, InvestmentNews – Morgan Stanley’s decision to leave an industry agreement known as the protocol for broker recruiting is an indication that the firm is working harder than ever to prevent its brokers from jumping ship, industry sources said. One veteran adviser wondered whether a non-solicit agreement could be applied to existing accounts or only to new clients. “Would that be supported for accounts retroactively or newly opened,” asked the adviser, who requested to speak anonymously. He added that he had not seen anything in writing from the company about a new non-solicit agreement.
Louis Diamond Quoted – By Jed Horowitz and Mason Braswell, AdvisorHub – Morgan Stanley said Monday that it is dropping out of the Protocol for Broker Recruiting that large firms signed more than a decade ago, underscoring what it calls its “commitment” to spend money on retaining experienced brokers and training new ones rather than hiring them from rivals.
Timing of Morgan Stanley’s Broker Protocol withdrawal sends shocks through RIA legal and recruiting circles
Louis Diamond Quoted – By Brooke Southall, RIABiz – From Morgan Stanley’s perspective, Phil Shaffer never should have walked out the door with $4 billion to $5 billion of client assets and a whole team to staff his new RIA, Halite Partners LLC. The New York-based wirehouse wanted to keep the Barron’s-ranked super-producer for more than just his substantial assets and revenues. Shaffer was family, having co-founded the elite Graystone Consulting-branded unit inside Morgan Stanley.
Louis Diamond Quoted – By Hugh Son, Bloomberg – Morgan Stanley, the world’s biggest brokerage by adviser count, has dropped out of an industry accord that allows financial advisers to defect to competitors without getting sued by their former employers. “I’d be shocked if Merrill and UBS don’t follow suit,” said Louis Diamond of Diamond Consultants LLC. “Those are the firms that have the most to lose with this deal after they’ve all said they’re not recruiting as much.”
By Mindy Diamond – The Protocol for Broker Recruiting was a game changer. It was created in 2004 by three of the then five wirehouses as a way to simplify the recruiting process and protect transitioning advisors from restraining orders, protracted legal battles and time out of the business. More than 12 years later, it is the seminal document that has in excess of 1,400 signatories. But what of the advisors that work for non-Protocol firms (the firms that have chosen not to sign on to the agreement likely because they don’t expect to do a lot of recruiting and/or because they worry about attrition and expect to go after departing employees with gusto)?
By Mindy Diamond – Dear Protocol member firm:
Please don’t pull out of the Protocol.
By Mindy Diamond, WealthManagement.com – In the eight years since it was written, 801 firms have signed onto the so-called broker protocol, which defines what kind of client information a departing broker can take with him to a new firm. That, in turn, determines the ease with which an advisor can take his clients, and their accounts, to the new joint. Advisors are allowed to take client names, addresses, phone/fax numbers, email addresses and account names; they can’t take tax ID or social security numbers, client statements, account numbers, or any other financial documentation pertaining to the clients.And they can’t let their clients know about the move or solicit them before they make the switch.
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