The Protocol makes sense for firms growing by acquisition; it’s a free pass out of the court system, TROs, injunctions and arbitrations. Simply put, if a firm believes that it will gain more advisers from the competition than it will lose to the competition, the Protocol makes good sense.
Firms that are not members of the Protocol also may decide to join. And current members may decide to end their participation. That said, no wirehouses have indicated an interest in ending their participation.
While the Protocol paves the way for easier transitions, no transition is easy. Advisers need to follow the specific requirements of the Protocol. Aggressive firms that have lost an adviser surely will seek to find evidence that an adviser exceeded what the Protocol allowed, and will march into court seeking a TRO and damages. Advisers must retain competent securities counsel well in advance of any move to a new firm, Protocol or not.
