On Recruiting

The end game: Why every adviser needs a 'go bag'

Three precautions to take before things turn ugly at work

Oct 23, 2012 @ 7:50 am

By Danny Sarch

Advisers, termination
+ Zoom

Watch any spy movie and the protagonist always has a bag stashed somewhere safe with extra passports, cash in multiple denominations, and a gun. If he or she has to flee in a hurry, the “Go Bag” is always ready.

Every financial adviser needs his or her own “Go Bag.”


You might have a retention bonus or a recruiting deal banked. But they are NOT employment agreements. In fact, the language in these contracts specifically states that it is not an employment agreement. As always, advisers are “at-will” employees. Simply put, that means that the firm which employs you has the legal right to fire you at any time, for any reason that does not violate the law. You, as the terminated employee, of course have the option to file a claim against your nasty employer if they have done you wrong. That could take years and in the meantime your clients will be long gone. If you are a good revenue generator, the odds of you being terminated for wearing an ugly tie or something else trivial are very small. But in this compliance driven world, a big firm will terminate your butt in a New York minute if they feel that anything you do puts their reputation at risk. And that retention or recruiting money that is banked but not yet vested? It will be contested by your former employer and your old account at that firm will be frozen.

So how do you protect yourself?

1. Make sure you have an up to date production run in order to prove that you are a big producer at your home at all times.

Remember, once you are terminated, you will no longer have access to the systems at your old firm. You probably have some pay stubs which can prove how much you have been earning. Those are useful, but hiring firms want to do more extended due diligence on your book. Production runs give them the level of detail that is necessary, while not violating the Recruiting Protocol.

2. Make sure to have a protocol spreadsheet client contact list up to date and at your home at all times.

The Protocol for Broker Recruiting allows you to take with you upon your departure the following information about your clients: Title of the account, e-mail address, all phone numbers, and all physical addresses. Do you have a firm Blackberry? As soon as you depart, your contacts will magically disappear off of your phone. If you have your protocol spreadsheet, you can be in touch with your clients about your situation immediately after your resignation. According to Thomas B. Lewis, an attorney in Princeton, New Jersey, who specializes in this field: “Every financial advisor, whether or not he or she is contemplating a move to the competition, should prepare a Protocol Spreadsheet. The Protocol Spreadsheet should be maintained by the financial advisor in his home or other safe location. There is no downside with maintaining the spreadsheet and it offers security if the transition timeline becomes expedited.”

3. Have a personal cell phone, paid for by you, separate from your firm's cell phone.

The firm may cancel your cell phone number upon your resignation if it is in the firm's name.

Modern technology gives your firm Big Brother capabilities. Want to have a private conversation with a prospective employer? Get a private cell phone. Remember, if a firm has to choose between a perceived threat to their revenue or reputation, either through regulators or in the Press, or your career, you will lose.

As Tom Lewis states: “It is all about business. If a firm can terminate the financial adviser before the adviser resigns, the firm may be able to retain some of the clients, or at least slow down the client transfer process. The protocol spreadsheet offers the adviser the lifeline needed to contact clients upon resignation or termination of employment.”

The takeaway? Be prepared.


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