You’re done with your current firm, and you’re ready to start something new. Before you do anything rash, consider seeking help from an independent firm that specializes in helping financial advisors transition from one firm to the next.
Seeking the counsel of an outside attorney three to four months before your departure can pave the pathway to a smooth transition, and it can act as an insurance policy. When you seek outside help from an attorney who has no affiliation with your firm, you’ll receive adequate counsel and have someone ready to provide vigorous defense in case your current firm decides to come after you.
The Four Ps: A Cautionary Tale of Underprepared Advisors
Proper Planning Prevents Poor Results. This phrase applies to nearly everything, and it especially applies to the transition process.
A dynamic advisor duo learned this lesson the hard way after moving from Charles Schwab to Morgan Stanley last month. The $750 million team left Schwab on Friday, spent the weekend converting their clients from Schwab to Stanley, and began their work with Morgan Stanley on Monday.
Within six days, the two men found themselves in the middle of a lawsuit. They were then dropped by their lawyer, due to a conflict of interest with the lawyer’s firm. Within a few weeks, the team was out of a job at Morgan Stanley and barred from soliciting their former Schwab clients.
When To Seek Outside Counsel
If you’re looking for a new firm or don’t have an attorney yet, consider beginning your search for representation at least six months in advance and engaging your chosen firm three to four months before you leave one firm for the next. The more time you give yourself, the easier it will be to create an exit strategy and check out of your old firm with your dignity in tow.
What To Expect From A Transition Attorney
Reaching out to an attorney who has no affiliation with your firm is the smartest move one can make when it comes to mitigating risk. When you work with a broker outside of your firm, it becomes easier to keep your transition confidential and avoid any potential conflicts of interest.
When you work with outside counsel, you can expect for them to review employment contracts, privacy policies, and non-competes. Based on the stipulations of those contracts, they will help you identify any potential roadblocks to a smooth transition and strategize with you to develop a game plan for your unique situation.
Ready to start making a move? Check out our Transitions Page or send us a note to learn more about our transition planning services.
This blog is our ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.