From the Desk of Jim Eccleston at Eccleston Law LLC:
On October 10, 2016, advisors Ken Griffen, Paul Vaida, Royden Grimm, Barry Saluk and Jared Bloxsom left Bank of America Merrill Lynch to join Janney Montgomery Scott in Mystic, Connecticut. The team has $800 million in assets under management.
From the Desk of Jim Eccleston at Eccleston Law LLC:
Advisors Rajeev Dhillon and Joseph Lesko left J.P. Morgan Securities to Join Wells Fargo Advisors in Fort Lauderdale, Florida. The team has $253 million in assets under management.
From the Desk of Jim Eccleston at Eccleston Law LLC:
On September 26, 2016, advisor Brad Weinman left Morgan Stanley to join Bank of America in West Palm Beach, Florida. Mr. Weinman has $240 million in assets under management.
On September 30, 2016, advisers Darren Lehrman, Brian Marzulli, and Lucille Costa left Stifel Nicolaus &; Company to join RBC Wealth Management in Parsippany, New Jersey. This team of advisers has $300,000,000 in assets under management and $1,500,000 in production.
From the Desk of Jim Eccleston at Eccleston Law LLC:
For three years FINRA has attempted to pass a rule that would make brokers’ employment transitions more transparent for clients. Last Wednesday FINRA passed the rule. The rule is designed to encourage investors to access important information relating to their accounts in a broker’s transfer to another firm.
The new rule requires that transferring brokers send an educational communication to investors if they are trying to persuade them to move to the new firm. FINRA will author document, and it will outline possible considerations for the clients such as whether the financial incentives at the new firm create a conflict of interest, whether any portion of the client’s assets cannot follow them to the new firm, and any potential fees or costs the client might face.
As the SEC views the rule, it will encourage customers to make inquiries to brokers which can help to increase communication between the two regarding potential implications of transferring assets. Moreover, the SEC feels that the increase of communication between the two will serve to benefit the customers when deciding whether or not to transfer.
An initial proposal required transitioning brokers to disclose details about their new compensation packages, but, after facing industry resistance, was modified to the current “educational communication” model. FINRA is confident that the new proposal is satisfactory to both investors and advisers. The fundamental concern being that the investors remain educated and the advisers receive consideration for the privacy of recruiting compensation that is often involved with transfer.
Industry professionals support the new rule, especially citing the balance it holds between both investors and advisers. Danny Sarch, president of Leitner Sarch Consultants, says, “It’s a sophisticated transaction and most clients don’t want to learn to that extent about it.” In his experience clients are less concerned with discovering the recruitment compensation package and more concerned with personal fees and restrictions.
A minor concern associated with the new rule may be that it accelerates the transfer of advisers who may be on the fence and hoping to get the jump on any new standards imposed by regulators. But Mindy Diamond, president and chief executive of Diamond Consultants, says that “for most quality advisers who have a deep relationship with clients, it will be a non-event.” She doesn’t expect that this should be a significant effect in the industry, at least for quality advisers. Mr. Sarch says that he typically advises brokers to reveal their recruiting package to clients in the first place. Through his experience in broker recruiting, previous firms will show the new compensation package to clients in an effort to deter clients from transferring anyway.
The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.
From the Desk of Jim Eccleston at Eccleston Law LLC:
A battle between Wells Fargo Advisors and a former employee turned ugly when emails leaked showing the employee purportedly had funneled business to his new firm, while still employed at Wells Fargo.
Wells Fargo accuses the rep of funneling business for eight months before he officially left the company. He is alleged to have breached his fiduciary duty and to have engaged in a “civil conspiracy.” Wells Fargo is asking for more than $1.7 million in damages.
The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.
From the Desk of Jim Eccleston at Eccleston Law LLC:
In its latest round of restructuring, Morgan Stanley has altered the number of management roles at their branch, complex and regional levels. The top positions affected are Associate Complex Managers (ACMs) and Complex Business Development Managers (CBDMs).
Morgan Stanley wants to expand the role of Associate Complex Managers and their latest changes appear to be doing just that. By early June, Morgan Stanley is looking to increase the number of ACMs by 30, leading to each of the wirehouse’s 82 complexes having an ACM.
In contrast to the increase of ACMs, there will be a reduction in the number of Complex Business Development Managers. After the restructuring, there will only be 56 CBDMs–a 14- person decrease from the previous number of 70. Many CBDMs will need to cover offices in more than one complex to account for this change.
In total, Morgan Stanley’s restructuring will result in a net increase of 16 management positions. This increase, however, will not be spread evenly. Some complexes will end up with a headcount higher than it is today, while others will see a decrease. The complexes which see an increase will be those that Morgan Stanley arbitrarily deems “fertile for growth.”
The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.