We regularly consult with good advisors who have been terminated. Unfortunately for advisors, many firms compliance departments have become more aggressive against what used to be considered “minor” offenses and “surprise” terminations are becoming more common.
Consider these 7 tips if you’re a good advisor that happened to get terminated.
- Stay calm. Being terminated is an emotional roller coaster experience. Many advisors will feel angry, betrayed, and resentful. For some, it is a real shock and extremely difficult to emotionally cope with, especially in the first hours and days after. This is natural but try to control these emotions quickly. There are a lot of things to do right now and you’ll need a clear head.
- Be proactive! Time is of the essence when you have been terminated. Other advisors are likely calling your clients within moments after you were escorted out of the building. The U5 language 30-day period has started. It takes time to evaluate other firms and to transition. This is not the time to take a few days off.
- Call Advisorbox. We can quickly bring you up to speed on what to prepare for; introduce you to securities lawyers with extensive experience with advisor terminations and FINRA; and introduce you by phone (initially) to firms that have more compliance flexibility and who would be interested in you joining. We’ll help you compare your options and move quickly to get you approved and up and running with another broker dealer.
- Call an experienced securities/FINRA lawyer (we can provide several referrals). Your lawyer can help you with the U5 language, negotiating outstanding recruiting note balances and related aspects of Protocol. If the firm has overreached in their U5 language then the lawyer can also help with Broker Comments that can be added into the U5, or even defamation claims.
- U5 language. The U5 is the main reason to hire a lawyer and not try to handle yourself. The firm has 30 days to post the Form U5 to your CRD. The “termination” will go into one of three categories: Voluntary, Permitted to Resign, or Terminated. The category and language your old firm uses is on BrokerCheck to stay (unless expunged) and can have a significant impact with your new broker dealer options as well as current and future clients. Your lawyer can request the language and edits, and help try to negotiate the best possible outcome.
- Examine recruiting options. Consider not wasting your valuable time calling all the managers at the different firms you know or know of. Streamline your productivity by having Advisorbox doing the groundwork for you. We have been through this many times and know which firms have flexibility and which ones don’t. Some firms will hire you before the U5 language is posted but most firms will need to wait until they know what the U5 language is going to say. We’ll help you navigate and narrow your focus.
Stay in touch with your clients. Consider sharing what happened, you are working through it, and will have a new home soon. It won’t take long for your clients to be called from your former firm. You want to be the one to initially let them know something has happened.
Join our list
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.