Switching firms with no contact agreements

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Jan 22, 2012 8:54 pm

Hey guys just had a quick question...

How have FA's switched firms and taken their books of business with them when most firms have no contact agreements in place?  I am starting with a wire and they have a 180 day no contact contract in place...

Any stories of switching firms and taking their books would be greatly appreciated.

Jan 23, 2012 8:45 am

Couple thoughts....

1) You can have a "friend" at the old firm babysit the accounts for the 180 days.

2) As a CFP, you have a duty to inform clients of where they can reach you.  Something like... "Following CFP rule # XXX, I have a duty to inform you that my new contact info is XXXXX."  Then let them contact you.

Jan 23, 2012 11:17 am

It's doubtful your old firm could enforce that.  BTW:  How are you at a "wire" and they don't follow protocol?

Like Amber said, you have every right to inform people that you will no longer be their advisor and have moved to another firm.  Outside of that, you can't say much else... if you have good relationships they will solicit you.  If not, they are gone.

Talk to an attorney.  Let him read your contract and write you out a script so you don't blow yourself up.

Jan 24, 2012 7:19 am

I disagree, Element. There are FINRA cases like this all the time, and many don't go in the departing advisor's favor. I was at EdJones, and believe me, they don't follow the Protocol.

Three days after leaving my firm to go indy, I got a certified letter from their lawyers, reminding me of my one-year no-contact agreement. The letter specifically stated I was forbidden to send out any communication in any form, but they agreed to notify the clients for me. The client letter the firm sent said I had left the firm and my new contact info was: XXXXX, but the client was in good hands at the firm, blah blah blah. They also inserted a FINRA client warning letter called something like "When You're Asked To Move With Your Advisor".

My only advice, after having done this just six months ago, is to make your move, follow the 180-day policy (no reason to end up in arbitration). If you had good relationships, a good portion of your clients will contact you and initiate a move on their own. You'll have lots of administration to do moving them over for the first few months anyway. Then get busy building a new pipeline. The six months will be over before you know it, and then it's Open Season on the remainder of your clients.

You'll also find something interesting, if your experience is anything like mine: the clients who were most loyal weren't always the ones I expected, and the ones who seemed to demand the most time and effort to keep happy, won't be. I was very pleasantly surprised who my "real" clients were, and they weren't the ones who gobbled up so much of my time.

Jan 25, 2012 1:48 am

Again, with all due respect.  Talk to an attorney. Have them review your contract and make a proper judgement based on their council.

IMO .. and this is not legal advice .. I think you have the right to notify your clients that you are no longer their advisor and where you have moved. It its not my opionion that is solicitation Failure to do so means you allow the "firm" to deliver the message.  Inland, please provide proof where an advisor has done just that and that alone and lost a FINRA case before you make blanket statements.  I am not talking about people sending crap to their clients or actually soliciting them.

BTW Inland, care to share the size of the book you moved over?