Editor’s note: I get to interview many people who have broken away from a wirehouse to set up their own business. Most of them are downright thrilled about their decision to move. At worst, they are merely happy that they can do what they believe is truly right for clients. But even these true believers have harrowing tales to tell about the journey. Strangely enough I have yet to hear from a financial advisor whose major complaint was about the considerable logistics of turning independent. Such details can be planned and generally are. The larger issue seems to be handling the one detail that cannot be planned – making sure that clients go along with the plan and at the same time leaving them out of the planning process. Here I have collected a few instances that underscore how difficult keeping it all inside can be. The bad news: losing the faith and sharing plans of a breakaway can have catastrophic consequences. The good news: keeping the faith generally leads to reclaiming virtually an entire book of business.

Consider the case of an advisor named Rick Gurz who broke away to join Commonwealth Financial Network in 2008 after seven years as a franchisee of Ameriprise. I met him at the Investment Management Consultants conference in May and he agreed to tell me about his breakaway from Ameriprise.

We sat out in the sunshine on a patio overlooking the bay and Gurz, 35, didn’t seem to have a care in the world. He had managed to put his customers in cash before the worst of the market downturn and he was adjusting well to the life as an independent rep affiliated with Commonwealth.

Yet when I asked him whether leaving Ameriprise had been difficult, his smile turned wry and he pointed to his hair, which was quite gray relative to his otherwise boyish appearance. Gurz explained that his hair had gotten much grayer during the two-week period between when he left Ameriprise and the time that he was allowed to contact his clients under his Ameriprise franchise agreement. “That two-weeks I was the most panic-stricken,” he says. “You’re not allowed to call your clients.” Gurz added: “Don’t forget that Ameriprise was calling my clients during that 2 week period, which really added to the stress.”

His story has a happy ending. Gurz ended up keeping 87 of the 90 clients he wanted to keep and he faced no lawsuit from Ameriprise. “You have to play by the rules and they can’t come after you,” he says. Technically, he says, staying within the bounds of these contracts is not so diifficult. “You have to do something stupid like send an e-mail to your client,” he says.

But making somebody understand the rules of breaking away and getting them to execute it are two different matters, according to Brian Hamburger, managing partner of The Hamburger Law Firm of Englewood, N.J.

Pack your bags

A wirehouse broker — and client of his — called him after Labor Day weekend. The client informed him that he was planning to play golf with his boss the next day and that he planned to let him know about his imminent breakaway. Hamburger informed him in the strongest terms that this was a move he should not make under any circumstances.

The client wouldn’t hear of it. He explained that in fact that his boss was one of his best friends and that it would be wrong to keep him out of the loop any longer. In the subsequent call from his client, Hamburger heard the outcome. The client told the news of the breakaway to his boss as he stepped up to the first tee box on the golf course.

The boss’ reaction was swift and decisive. “He said: now my job is on the line,” Hamburger says. “Pack your bags.”

This need to come clean with plans to break away is something that Thomas McGuirk, 38, principal with Martin Thomas Wealth Management of Palo Alto, Calif., wrestled with in the lead-up to moving his assets from Smith Barney to Schwab Advisor Services last year, he says.

“I didn’t like the person I was during those three months” leading up to the breakaway because he felt duplicitous when he interacted with clients, he adds.

McGuirk ended up regaining 95% of the clients he had at Smith Barney but he did encounter some resentment from clients in the aftermath. “Clients were a little upset and said: why didn’t you say that before?” he says. “Initially, they said: we’re not good enough for you. They [also] said: did you get fired?”

Wholesalers are very good

Brian Doe, wealth advisor with Gratus Capital Management chose not to tell his clients about his imminent breakaway from a wirehouse. He knew the importance of confidentiality. But he also felt the need to share his plans with someone other than his attorney. Doe’s decided he could trust his vendors.

“I talked to mutual fund wholesalers and asked them what [asset custodians] to talk to,” he says in a Schwab Advisor Services audiocast. “I was thrilled [to have sounding boards] and most wholesalers are very good at keeping confidentiality. They do this all the time.”

Doe found that not all his clients were pleased to have news of the breakaway sprung on them after the fact. “One [client] was initially upset that I didn’t tell him I was leaving,” he says. Doe lost two other clients that stayed with the wirehouse.

Hamburger doesn’t believe it’s really worth telling anyone about leaving. There’s too high a price to pay. Last year, he received a phone call at 5 a.m. from a distraught client. The would-be breakaway broker had been drinking with associates when a friend came up to congratulate him on his plans for independence. He was certain word would get back to his boss and that’s when he called Hamburger.

Sure enough, the next day when the broker came back from lunch his branch manager was sitting in his office and fired him.

One set of Hamburger clients who took his pleas to stay quiet seriously were David Hou and Mark Sear, the two lead partners of Luminous Capital that left Merrill Lynch in May of 2008. Not only did they not breathe a word of of their planned breakaway to clients but it was a shock to their own administrative staff on the Friday afternoon that they decided to leave.

Vacation in Mexico

An aspect of their breakaway that didn’t get covered in the three-part series written about them was that there was a sixth partner that they didn’t tell until after they’d broken away. He had made it clear that he wanted to stay with Merrill Lynch so they kept him completely in the dark about their plans. Unfortunately for that partner, he was on vacation in Mexico [not by design, Hou says] when the breakaway occurred and had to catch a flight back immediately.

There was one thing the Hou-Sear team did that may have made it easier to keep the secret. All along they had told their staff, their clients and even their bosses at Merrill Lynch that someday they might break away and form their own business. When it finally happened, the timing was a surprise but its occurrence was no surprise at all.

Though the Hou-Sear breakaway could become a case study at Harvard Business School someday for the intensity of the planning leading up to it, Sear admits that he didn’t sleep the night after the breakaway. He was lying in bed with the realization that for all the planning, he was not assured of getting his clients back.

Despite experiencing his own misgivings,the idea of spilling the beans never occurred to McGuirk. “I had too much to lose,”’ he says. “I’ve got a mortgage and two kids.”

And one of the few people he informed in advance didn’t take the news well.

“It was a tough conversation with my wife,” McGuirk says.