- On December 14, 2017
Advisorbox has been scanning news daily for Morgan Stanley going after departing advisors with Non-Protocol TROs.
Since November 3rd, we have seen only two stories (both by AdvisorHub) of Morgan Stanley successfully winning a TRO against a departing advisor. In both cases, the advisors didn’t play by the new rules and paid the price.
The first advisor allegedly printed out a 14-page list of names, cellphone numbers and e-mail addresses of clients five calendar days before he “abruptly” resigned and sent another list of 200 clients and prospects to his personal e-mail a day before leaving.
Any of the wirehouses would have gone after this advisor even under Protocol. He not only didn’t follow Non-Protocol, he didn’t even follow Protocol rules.
The second advisor approached his transition as if Morgan Stanley was still under Protocol and the contact information he took is sanctioned industrywide by the Broker Protocol. While it is sanctioned by almost every other firm than Morgan Stanley and UBS, Protocol rules no longer apply to Morgan Stanley advisors.
If the advisor approached his transition from a Protocol perspective then he may have also solicited clients by phone and email as Morgan Stanley accused him of. In this case, Morgan Stanley cited a statement from one of the clients that he or she “knew it was coming,” meaning they had advance notice from the advisor that he was going to leave Morgan Stanley. This again, would have violated Protocol rules more or less Non-Protocol.
It’s not clear to us if Morgan Stanley was asking for a TRO from just the fact that the advisor simply contacted his clients after departing, or if the advance notice he gave to clients and the information he took showed that he was indeed soliciting his clients.
If the advisor did not take company information and simply notified his clients that he resigned from Morgan Stanley without soliciting the clients by asking them to join him, we’re not sure a TRO would have been granted.
We don’t see these first two cases as landmark examples of what Morgan Stanley advisors can expect if they do follow the non-solicitation provision of their agreements. Rather, we see these two cases as an example of what happens when an advisor doesn’t get and follow legal counsel regarding a Non-Protocol departure.
Morgan Stanley advisors considering leaving should check out these articles first:
And read our Non-Protocol BluePaper
Join our list
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.