Step One: Planning
It is essential to anyone contemplating an important career decision to plan well and in advance. Career planning and counseling is vital to deciding whether to leave, where to go, and when to get there. Although very few people need to know about your decision (especially clients), seeking the advice and counseling from respected peers and other individuals will be helpful to navigate the process more successfully.
Step Two: Retain Legal Assistance
Planning should include legal counsel. Almost every financial advisor working for a brokerage firm has some type of post-employment restrictive covenant in place. That agreement can include restrictions on solicitation, competition, and the use of confidential information. What, if anything, you can take and who you can talk to about your move can involve significant traps for the unwary. These restrictions can vary widely between firms as well as between those firms who have signed on to the Protocol for Broker Recruiting. It is essential in your planning to make sure you get expert legal advice regarding the appropriate process for your transition.
Step Three: Don’t Pre-Solicit Clients
Although you may want to discuss your impending move with some of your biggest and best clients, it is critical that you refrain from doing so. While you are employed by your current firm, you owe that firm a fiduciary duty to act in its best interests. By “feathering your nest,” you are no longer acting in your employer’s best interest but in your best interest. Such conduct will likely result in future legal difficulties. Although you may want to discuss career counseling with certain centers of influence, it is important to make sure that those individuals are not clients and that you are not discussing the transfer of any client accounts prior to your departure.
Step Four: Don’t Take Anything With You
Although you may believe that client contact information, account information, and client holding positions may be helpful in your transition, it is vital that you leave those records behind. Those documents and that information are viewed as property of the employer and as such cannot be taken with you. Many firms go to great lengths to protect the confidentiality of this information and will seek to enforce this information’s confidentiality to the fullest extent possible. The fact of the matter is that there is very little that you need to take with you. Most client information is easily available on the Internet and the relationships that you have hopefully built with your clients should survive your transition. To the extent that you need any client information in order to transfer accounts, you should obtain that information from the clients themselves after you move firms.
Step Five: Watch What You Are Doing in the Weeks and Months Leading Up to Your Departure
Although you may have a legitimate business practice of printing off client information prior to a meeting, that practice will be closely scrutinized if you decide to print off, download, or email any information to yourself in the weeks or days leading up to your departure. Every large financial institution has the ability to inspect and investigate practically every keystroke on their computer system. As such, your conduct and activity during the weeks leading up to your departure will be under a microscope. Therefore, the seemingly innocuous act of printing off of client information for a client meeting may seem minor. However, when viewed in light of your imminent departure, it may look like you are trying to abscond with client information in order to aid in the transfer of those accounts when you arrive at your new firm. Nothing sparks legal problems like the perceived misappropriation of confidential information. Rest assured, it will be discovered.
The process for transferring employment can be a very stressful and difficult decision. However, with the proper guidance and counseling, you can safely navigate the often treacherous waters between feuding brokerage firms.