Smooth Transitions

Smooth Transitions

Addressing the Legal issues arising from the departure of employees & Business breakups

Category Archives: Financial Advisors

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Broker Update

Posted in Financial Advisors
Though there are not many broker/dealer defections in the news, movement within the the broker/dealer business continues.  Merrill Lynch recently nabbed several professionals from Wells Fargo and Morgan Stanley.   Though movement does not seems to be as prevalent as several years ago, it continues. Considerations for making a move remain the same.  When considering… Continue Reading

Financial Advisors Still on the Move

Posted in Financial Advisors
 A recent article  from Financial Planning suggests that financial advisors continue to be on the move in 2012.  But the trend is not departures to the traditional wirehouses – instead, they are going independent: Twelve percent of financial advisors change firms annually, according to [Chip] Roame, but two-thirds of those advisors are still “landing” at another wirehouse.… Continue Reading

Negligent Supervision & Hiring

Posted in Financial Advisors
  The Case FINRA recently fined Merrill Lynch $1 million over a Texas Ponzi scheme.  The case, which involved a San Antonio broker who was sentenced to prison was covered in a recent blog post in the Stockbroker Fraud blog.  The Merrill broker persuaded investors to put money into a partnership and used at one… Continue Reading

Financial Advisors – Look Before You Leap

Posted in Financial Advisors
  According to a recent survey, brokers and wealth managers will be on the move during the remainder of 2011 and in 2012. The survey,  entitled “Wealth Management on the Move: The Moment of Truth” notes that there was a significant "buying" of advisors and wealth managers in 2008 and 2009 through retention packages.  These usually took the form of forgivable… Continue Reading

Financial Advisors Venture Into Social Media – Sort Of

Posted in Financial Advisors
                                                      Last year FINRA published its social media guidelines as contained in Regulatory Notice 10-06.  As discussed previously, broker/dealers are subject to very onerous restrictions when it comes to social media communications.  The restrictions are so burdensome it is questionable why a financial advisor would use social media for business purposes beyond general networking. Morgan Stanley’s… Continue Reading

Are wirehouse brokers on the move?

Posted in Financial Advisors
A recent survey by Boston-based Alite Group found the following: 11,000 wirehouse reps may be on the move; 15% are satisfied with their employer; 20% are ready to move and would like to do so in the next 2 years; 2/3’s of those with retention plans in place say there is a chance they’ll leave;… Continue Reading

The Big Deal with Brokers and Fiduciary Duties

Posted in Financial Advisors
  After the financial meltdown there was talk of the Securities and Exchange Commission imposing a fiduciary duty standard on financial advisors and brokers.  That no longer looks like the case and apparently the SEC is only going to "study" the situation.  Why does it matter?  In Texas, a fiduciary-defendant has the burden of proof… Continue Reading

Financial advisor update.

Posted in Arbitration, Financial Advisors
Predictions about a slowdown in financial advisor recruiting appear to be premature. Last week, Wells Fargo, which purchased Wachovia, which purchased AG Edwards, announced it was looking to add 1400 financial advisors.  It plans to recruit 400 new advisors and obtain the others from other firms. This comes on the heels of reports that BofA intends to add 2000 advisors.… Continue Reading

Are the broker recruiting wars over?

Posted in Financial Advisors
From late 2008 through 2009 financial advisors were on the move.  Thousands of brokers left their positions with firms like Merrill Lynch, Wells Fargo and UBS.  Many transitioned to new brokerage houses enticed by lucrative signing bonuses and compensation packages.  Others were simply unsure of ever changing policies and compensation systems that resulted from industry… Continue Reading

When will BofA join The Protocol?

Posted in Financial Advisors
Despite indications that it would join The Broker Protocol last year when it acquired Merrill Lynch, BofA has yet do so. The Protocol, which has been frequently discussed in this blog, allows departing brokers/advisors leaving a firm to avoid claims for breach of non-compete or non-solicit agreements. A Merrill Lynch spokesman has indicated that Merrill is… Continue Reading

Non-Compete Battles: IBM versus Dell

Posted in Financial Advisors
                         In a recent non-compete decision, Federal District Court Judge Steven Robinson denied an injunction sought by IBM to keep a former vice-president, Steven Johnson, from going to work for Dell.  The court rejected IBM’s contention, that Johnson had access to trade secrets: The court believes . . . that IBM has overstated its case.  Mr. Johnson does not have the… Continue Reading

Non-Solicitation TRO Denied in Broker Case

Posted in Financial Advisors, Non-Solicitation Agreements
  Judge William C. Griesbach, of the Eastern District of Wisconsin, recently denied a request for a temporary restraining order filed by Smith Barney against several departing brokers and their new employer, Robert W. Baird & Co.  Smith Barney sought a TRO in conjunction with Rule 13804 of the FINRA Code of Arbitration Procedure, meaning entry… Continue Reading

Financial Advisors and Non-Competes in a Brave New World

Posted in Financial Advisors, Non-Compete Agreements
After Bank of America (“BofA”) purchased Merrill Lynch it put on the full-court press to keep one of Merrill’s most important assets, its brokers. What has resulted is “The Advisor Transition Program (“ATP”)”, which provides financial incentives for brokers who remain following the merger. Reportedly, if a broker leaves during the seven year term of… Continue Reading