When large companies recruit brokers, it is not uncommon for them to offer bonuses worth hundreds of thousands of dollars. Bonuses are granted in the form of forgivable credits, which are usually depreciated over a period of three to seven years, as long as the broker remains in the business. In October, UBS said it wanted to increase the number of brokers working in teams, another tactic that normally complicates a consultant`s task of leaving the company. If a team wants to withdraw, everyone on the team must accept the move. High-level partners, who are generally less inclined to leave, can exert enormous influence on other team members because they often control the team`s income and salaries, noted Casey Knight, executive vice president of recruitment at ESP Financial Search. The big teams keep going. JPMorgan Securities has successfully succeeded Morgan Stanley Broker and advises. Last year, five individuals or consulting groups with $6.9 billion in client assets left Morgan Stanley to work at JPMorgan Securities, according to InvestmentNews data. The Broker Protocol is an agreement between asset management companies to prevent costly litigation caused by brokers who change companies.  Successful broker relationships allow asset management companies to benefit from client investment.
If a broker leaves a business, the business may lose business. Clients who had established trust with a particular broker want to keep their business with that broker. Brokers also want to maintain a well-established clientele.  Thus, brokers try to bring their clients to their new business and clients try to stay in touch with their broker. Since 2004, the brokerage protocol allows brokers to contact their clients and pursue them smoothly to the new company.  See Bruce Kelly, Broker Protocol: Indecision Over Recruiting Agreement Is Rampant, Investment News (February 24, 2018, 06:00), www.investmentnews.com/article/20180224/FREE/180229961/broker-protocol-indecision-over-recruiting-agreement-is-rampant. In late August 2015, four Merrill brokers – Michael Carr, Jeffrey Hogue, Jeffrey Rizzo and Kirk Ruth – resigned from Merrill`s Gainesville, Florida office and entered a new UBS De Gainesville office. The four brokers had a large book of assets under management of $870 million, which generated annual sales of more than $4.5 million.
Carr had been with Merrill since 1997; Ruth since 1994 and Hogue and Rizzo since 2000 and 2013 respectively. The group focused on the extremely wealthy and was recruited by UBS to work from a new UBS office in Gainesville that UBS built specifically for its team. In other words, while the protocol for recruiting brokers offers a means of security, the move aside can still have terrible consequences for the broker`s business. It is therefore strongly advised to hire a competent lawyer to support the transition and ensure that all requirements of the brokerage protocol are properly addressed. An essential requirement of the brokerage protocol is that, in order for the broker to register the customer`s information indicated, the dealer-dealer he leaves and the new company must be on the broker`s minutes list.