InvestmentNews

May

2014

UBS Advisers Stage Revolt to Save Branch Manager

From the Desk of Jim Eccleston at Eccleston Law Offices:

UBS brokers in San Francisco recently staged a kind of mutiny with some prepared to resign in order to prevent their popular branch manager, Michael Williams, from being replaced.

The firm considered replacing Williams due to poor branch performance. Of the firm’s eight geographic regions, that region was ranked among the lowest in terms of recruiting.

Moves are common in the brokerage industry, where managers are frequently reassigned, relocated or sometimes fired as firms keep a close watch on performance. Advisers may be reluctant to see their manager go, but it is rare for the firm to backtrack on its decision.

About 20 of the 75 advisers objected. Many included top producers, who began placing calls to executives at the firm, including the head of the adviser group, the head of wealth management, and the firm’s chief executive. They told the executives the move was a mistake. Support for Mr. Williams mounted, and by the weekend, the firm reversed its decision.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

May

2014

An Expected Acquisition Trend in Broker-Dealer Industry

From the Desk of Jim Eccleston at Eccleston Law Offices:

According to a report from InvestmentNews, given the higher cost in the broker-dealer business over the past few years, some broker-dealers that don’t have strong capital behind them may have no choice but to look for an exit strategy. In 2014, six to eight broker-dealers are expected to be acquired by larger entities.

Advisors who work for a broker-dealer that is being acquired need to assess acquisition. For example, doesthe acquiring firm plan to leave the broker-dealer as a stand-alone or roll it up into another broker-dealer? Advisors need to keep a watchful eye on it, because even if the acquirer announces a plan to leave the firm as a stand-alone, it could change the plan quickly after due diligence. In addition, advisors need to understand possible administrative changes. For example, advisors who are working in a smaller broker-dealer where they enjoy the accessibility of key senior management may find that if the firm is purchased by a larger firm with plans for a roll-up, the new situation may not suit them.

Likewise, advisors need to do their own due diligence to clarify if the new culture, technology, clearing platform, business model, and compliance/supervision structure etc. are a good match for themselves.

If due diligence shows that the firm acquiring the broker-dealer will add value and fulfill the adviser’s needs and wants, then the change could be beneficial. If the new firm doesn’t offer that, another firm may be a better fit.

Apr

2014