Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance'

Nov 17, 2017 @ 1:34 pm

By Bruce Kelly

Financial advisers and securities industry executives widely expect that another large firm will follow Morgan Stanley's decision last month to dump the broker protocol, a move widely considered to discourage the firm's 15,759 brokers from jumping ship.

Morgan Stanley advisers were told in October that the firm would begin enforcing client confidentiality and non-solicitation agreements, jarring some advisers.

But one brokerage, Raymond James Financial Inc., is calling for the industry to stick with the protocol, which allows an adviser to take a limited amount of client information when leaving a firm for a new shop and essentially eases the move.

Why is Raymond James supporting the broker protocol in such a full-throated manner? The agreement, followed by more than 1,500 firms, lays a groundwork for a better relationship between financial advisers and clients, according to an open letter to the industry signed by three senior Raymond James executives and sent to InvestmentNews Friday morning.

The Raymond James executives also asked competitors to take out their checkbooks to pay for the administration of the protocol.

"We are asking firms to continue supporting the protocol and to join Raymond James in funding an administrative entity and ensure its longevity and relevance," according to the letter, which was signed by Dennis Zank, CEO of Raymond James & Associates; Scott Curtis, president of Raymond James Financial Services; and Tash Elwyn, president of Raymond James & Associates private client group. Raymond James Financial has close to 7,300 advisers across different business channels.

"Regardless of firms' ultimate choices regarding the protocol, Raymond James continues to recognize the primary relationship in our business is between financial advisers and their clients," the executives wrote. "We will, therefore, continue supporting advisers' rights to affiliate with the firm that's most appropriate for their business and best for their clients."

The protocol is currently maintained by an Ohio law firm, Carlile, Patchen & Murphy, and its securities litigation practice.

Merrill Lynch, UBS PaineWebber and Smith Barney were the founding signatories of the agreement, the Protocol for Broker Recruiting, in 2004. Morgan Stanley and Wachovia Securities (now Wells Fargo Advisors), the remaining wirehouse firms, followed in 2006.

Prior to its establishment, big brokerage houses would seek to prevent clients (and their assets) from walking out the door by taking legal action against the departing adviser. Typically, that took the form of a temporary restraining order preventing the adviser from contacting, and soliciting, his or her clients pending a negotiation.


What do you think?

View comments

Recommended for you

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Featured video


Why does social media matter for financial advisers?

Social media is a reflection of who you are. But who are you as a financial adviser? Debra Bednar-Clark of DB+co offers some solutions to enhance your practice.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Tax update: Brady says sales tax deduction in final bill

Taxpayers will be able to deduct state income taxes or state sales taxes in addition to property levies — up to a $10,000 cap.

Critics say regulation hasn't curbed overly rosy projections for indexed universal life insurance

They say rule didn't go far enough and more stringent measures may be necessary.

Broker, retirement groups make last-minute pleas to change tax legislation

Pass-through provisions are target of groups representing employee-model brokerage firms, as well as retirement plan advisers.

House and Senate reach tentative compromise for tax overhaul

Lawmakers still need to get a cost analysis of their agreement, so it's not yet definite, according to a source.

Advisers' biggest fears for 2018

What keeps advisers up at night.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print