We project there are hundreds of Morgan Stanley advisors who have been in a “non-protocol recruiting holding pattern” until they see what happens with the first brave souls that depart for other firms. This article is written for you.
The first handful of departures and corresponding TRO results shaking out to be what we have written numerous Blue Papers about; “Play by the new rules and you’ll be fine, don’t play by the new rules and you’ll pay the consequences”.
The industry has been watching the first reported departures, how Morgan Stanley has reacted with TROs, and how the TROs have played out. The first few advisors who left Morgan Stanley (since non-protocol) showed the example of what not to do when leaving a non-protocol Morgan Stanley. In each case, the advisors and the firms they joined were careless and Morgan Stanley made them pay the price with three successful TROs granted.
Then Ameriprise successfully wins TRO against Morgan Stanley and while we haven’t been able to verify yet, we heard that the TRO against the advisor that bolted to Baird is being dropped.
After the first handful of moves and TRO examples, we see three themes developing:
- You can count on Morgan Stanley to file a motion for a TRO against you when you leave.
- If you don’t play by the rules and follow the correct process, you will lose.
- If you play by the rules, get and follow legal advice, and follow a well-designed plan and process, you’ll win.
There are the firms who are leaders in our industry who are currently and proactively recruiting Morgan Stanley advisors, and then the others, who would rather sit on the sidelines for the time being. In both cases, advisors and firms are seeing that successful Morgan Stanley recruiting transitions to other firms can happen. This means more successful transitions will happen as MS advisors and firms adapt and feel more comfortable with the precedents being set.
We implore Morgan Stanley and UBS advisors to follow non-protocol best practices and make sure the firm you’re are considering joining has a well-defined non-protocol transition strategy and procedures.
Any firm worthy or you joining will be proactive in mapping out the do’s and don’ts for pre-transition, resignation and transition stages. They’re going to have you speak with expert attorneys to counsel you and reinforce the do’s and don’ts. If the firm you are considering hasn’t done this then ask about their plan to successfully transition you to their firm in a way that would keep Morgan Stanley from winning the TRO after you leave.
This is a serious decision you are making. Losing a TRO because you didn’t get the right kind of support and direction from the firm you joined is not acceptable and completely preventable.
If the firm you are considering joining doesn’t have a plan of action for you, or you find their plan inadequate, then we encourage you to pause and think through if that is the correct firm choice for you. Why even consider joining a firm that is willing just to wing it when it comes to your transition?
Consider calling Advisorbox to discuss firm options, both traditional and independent, that take protecting Morgan Stanley and UBS advisors that join them seriously.
Sources and Resources:
Check out AdvisorHub’s article: EXCLUSIVE: Morgan Stanley Brokers Jump to Ameriprise, Win in Court
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