UBS & Morgan Stanley Advisors: How to Beat the TRO When You Leave

For UBS & Morgan Stanley advisors who are evaluating joining a different firm and/or breaking away to independence, beating the TRO motion is a top concern. One infraction can be enough for you to lose a TRO motion and be restrained from contacting your clients. This process can take weeks and months to fully resolve, confusing your clients and delays in transitioning them over. It can also cost thousands to tens of thousands depending on the scenarios involved.    

You have a profound likelihood that your wirehouse employer will file a TRO motion against you when you depart. They do this because they believe that legally your clients are their clients. They think your clients value the logo on your business card more than your name on the card which they have a trusted relationship with.

If you utilized broker protocol to join UBS or Morgan Stanley in the last dozen years and successfully transitioned your clients, they still think your clients now belong to them since they exited protocol. The recent non-solicitation requirements UBS has implemented puts a giant explanation point to their view of client relationship ownership.

If you leave and join a different firm or model, it is probable (and should be expected) that UBS/MS will file a TRO (Temporary Restraining Order) to attempt to keep you from contacting your clients and enforce non-solicit and/or non-compete provisions in your agreement with them. If you’re a UBS advisor who is still in a position to only have to pay back debts to be released from the non-solicitation, then your path is easier, for the time being.

While winning against the TRO is possible, the right strategic plan is necessary to make it probable.

Make beating the TRO your top priority

• The negative impacts of losing a TRO when you move firms is significant enough that winning against the TRO motion that will be filed against you should be your top priority.
• Approach the entirety of the recruiting process and transition to the TRO end goal as always top-of-mind. When this is your top priority in both thought and action, you’ll be appropriately positioned to beat and even potentially avoid a TRO motion.

Get into the Non-Protocol mindset

• The non-protocol mindset is merely having the frame of mind that broker protocol doesn’t matter and all that does is the non-solicit and non-compete provisions in your employment and/or recruiting bonus agreements.
• The non-protocol TRO battles we have seen thus far has shown that the argument that even though UBS/MS is not in protocol, the advisor should still be able to leave under protocol, doesn’t fly with judges.
• Forget what you know about protocol because it doesn’t apply in any way whatsoever to you now.
• In the cases thus far where the advisor lost the TRO, the theme of their arguments reflected the advisor was in a protocol mindset approach.
• Non-protocol moves must be approached with the non-protocol mindset.

Read and utilize the Non-Protocol BluePaper

• Download and/or print the Advisorbox Non-Protocol BluePaper.
• Become familiar with the key aspects and themes of non-protocol recruiting moves.
• Make sure that you don’t print or email confidential information or mention to your clients that you will be moving firms before you move. The specific plan and the do’s and don’ts will be fully explained.    
• Get up to speed on what non-solicit provisions mean and don’t mean.
• Review the tips and process steps for successful transitions and TRO victories.
• Read the examples of both the advisors who did it wrong and lost and those that did it right and won.
• Highlight and write out notes on questions and clarifications you may have from this review to discuss with your attorney.

Expert Attorney Consultation

• We see getting non-protocol recruiting transition advice and direction from an experienced and competent attorney as a mandatory requirement to ensure TRO success probability.
• There are too many variables and nuances involved just to use any industry attorney. Ask the attorney about their experience and prior successes and don’t just assume all attorneys are equal in their capacity to guide and consult you through the process successfully.
• The firm or platform you are considering joining should both introduce you to such an expert attorney and pay for your consultation. Any firm deserving of your consideration should require you speak to such an attorney.
• If Advisorbox introduces you to an opportunity where the firm has the plan but doesn’t pay out of pocket for your attorney consultation, Advisorbox will step up to pay for it out of our pockets. This is how important we believe this step to be.
• If you are evaluating multiple firms and want to use an expert attorney not provided or recommended by a specific firm, then just reach out to us for recommendations of attorneys who are experts in this particular niche.
• UBS and Morgan Stanley have different non-solicit provisions and depending on when an advisor joined UBS/MS they may have differently worded provisions in their agreements as the language changes over the years.
• Team and any “client acquisition” agreements can also take legal priority over employment agreements and must be reviewed. Find your agreements and have them ready to provide your attorney so they can ensure the proper plan of action can be developed for you.

The firm/platform you are joining should take the lead in developing your plan for pre-transition, resignation, and onboarding for non-protocol firms like UBS and Morgan Stanley. For more information on the role, your firm/platform you are considering joining should play see this article: UBS & Morgan Stanley Advisors should use TRO as recruiting litmus test.

We all know it’s one thing to have a plan and another to follow it. Staying disciplined in every step of the process in following the non-protocol plan provided by the firm you are joining combined with expert attorney guidance is critical. This can’t be understated. There is a proven plan and path for beating TROs and rapid client transition.

Advisors who are the gatekeepers of their client relationships will not find it difficult to notify and transition clients without breaking non-solicit provisions.

See Non-Protocol BluePaper