Merrill Takes Stand, Says It Won’t Leave Protocol for Broker Recruiting
Attempting to differentiate itself from rivals that have lifted brokers’ protection to join other firms without fear of being sued, Merrill Lynch’s head of wealth management said the big brokerage firm will not immediately follow.
“While other firms are focused on leaving the Broker Protocol as a way of retaining advisors and clients, we’re staying focused on making sure that our advisors have everything they need to serve their clients and grow their businesses,” Andy Sieg told field managers on Monday morning, according to a company spokeswoman.
“We’re asking our advisors, in turn, to concentrate on two things: first, to help existing clients achieve their financial goals, and second, to acquire new client relationships,” Sieg said. “We continuously evaluate the competitive landscape, but we are not making plans to leave the Protocol.”
The spokeswoman declined to specify whether Sieg made any time commitment to staying in the pact, which permits brokers to join other Protocol signatory firms with five pieces of basic customer-contact information from their former employer.
Morgan Stanley and UBS Financial Services in the past month said they were leaving the Protocol, with the former arguing that it no longer protects large firms from losing talent and clients because the pact has been “gamed” as thousands of small firms have become members.
The decision could win Merrill popularity points from advisors, in contrast to their reaction to its unpopular decision last year to break ranks with competitors and prohibit commission-based retirement accounts.
The Protocol began in 2004 as an agreement among UBS, Morgan Stanley predecessor Smith Barney and Merrill so they could reduce expensive litigation costs as they sought restraining orders from courts when brokers jumped among them.
Recruiters, brokers and managers have widely expected Merrill and Wells Fargo Advisors, the other national “wirehouses,” to quickly make their escape. A Wells Fargo executive said last week that it had not yet made a decision about whether to remain a signatory to the protocol.
Sieg’s comments were reported earlier by “InvestmentNews.”