Broker protocol is good for investors, needs to be strengthened


That may seem hyperbolic or even disingenuous to those who view our profession with mistrust. And I can understand that, given the approach of some in our profession or, better said, our industry. My terminology changes to “industry” because, sadly, that’s the opinion of some financial services firms: They instead consider this an industry in which you are either a manufacturer of products or a distributor of products that they or someone else manufacture.

That’s not the profession as I see it. Rather, this is a profession that is about people and their financial well-being. The best advisors truly understand their clients and their financial situations, and help them make decisions to achieve their life goals.

Which is why it pains me as I witness our profession’s Protocol for Broker Recruiting start to unravel. For those unfamiliar with the protocol, it is an agreement — struck more than a decade ago between most financial services firms, big and small — that allows financial advisors to bring a limited amount of client contact information with them if they choose to change firms, so they can contact their clients and continue to provide advice and service once they have joined the new firm.

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While I’d argue that the protocol doesn’t go far enough, given that advisors can’t explain their plans to clients ahead of time — often creating confusion when an advisor is suddenly at a new firm without warning — some firms have recently decided that the parameters of the protocol are too much. In our industry’s equivalent of Brexit, two large signatories have exited the agreement.

These firms have decided to build walls around their advisors, making it harder for them to leave if they choose to do so.

Raymond James is a member of the protocol and intends to remain. We believe in freedom and the power of choice. We believe we should aspire to support our advisors so well — add so much value to how our advisors positively impact their clients’ lives — that our advisors would never dream of serving their clients from another home.

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