SIFMA will take over administration of Broker Protocol list

On May 17, the Securities Industry and Financial Markets Association is taking over administration of the Protocol for Broker Recruitment from the law firm that has maintained it since its beginning in 2004.

SIFMA does not intend to change the way the protocol and the list of signatories is managed, said spokesman Andrew DeSouza. The new contact to join the list is Ryan Foster, who can be reached at rfoster@sifma.org and at (202) 962-7388.

Until this month, the Protocol, as it’s known in the industry, has been maintained on a pro bono basis by the Manhattan-based law firm of Wachtell, Lipton, Rosen & Katz. That firm kept the list of signatories and added joinder agreements as more firms signed on. For an explanation of how to join the Protocol, see this story: Which firms get on the Broker Protocol and how your firm gets on the list. RIABiz routinely publishes the list of signatories to the protocol.

Back in 2004, the signatories included only a handful of major Wall Street firms, including Potocol founders Merrill Lynch, Citgroup and UBS. For the first years, firms joined at a slow pace, taking advantage of the no-fault recruiting truce among the wirehouses.

No litigation

About two years ago, as the breakaway movement began to grow faster, the number of signatories exploded. Now, it’s used as a legal tool that allows breakaway brokers to depart wirehouses, taking client lists with them, but without facing litigation.

Existing RIA and broker-dealer firms also use it to recruit brokers from wirehouses.

As of April 30, there were 471 firms on the list.

Managing the list and coping with questions from hundreds of firms had probably grown unwieldy for the white shoe firm, suggested Robert Ross, senior counsel at New Jersey-based Hamburger Law Firm.

“I doubt there was much more to it than that,” he said via e-mail.

In addition to news of the shift of oversight, the latest list of signatories was also released. RIABiz posts updates to the list of signatories as we receive them. The link is permanently on our directory homepage, riabiz.com/d, in the upper right hand corner.

Twenty-two companies joined between March 12, when RIABiz last updated the list, and May 30. They are:

Thomas Financial Associates Inc.
Center Street Wealth Strategies, LLC
Client First Financial Services, LLC
Ensemble Financial Services
Fitch Wealth Management Group, L.L.C.
Family Office Group LLC
TriCor Financial, LLC
QA3 Financial Corp.
Denali Wealth Management, Inc.
Dynamic Wealth Advisors
Sequoia Wealth Management Group LLC
First Citizens Bank
Pacific West Financial Consultants, Inc.
Viceroy Consulting LLC
Viceroy Private Wealth LLC
Financial Insights, Inc.
TLA Capital Management, LLC
SF Sentry Securities, Inc.
Acela Capital Management, LLC
Kenilworth Asset Management, LLC
Spyglass Securities, LLC
Roush Investments, LLC

Different firms have different reasons for joining the protocol. Sequoia Wealth Management Group LLC joined the broker protocol on April 15, which was also the day that it broke away from UBS to become an independent advisory firm with Raymond James.

Playground rules

“It’s just playground rules at a time [when] duress or stress might be high,” says Matthew J. Schafer, founder of Sequoia Wealth Management Group of Petaluma, Calif. “We joined because UBS joined and they said: if you join, we won’t have problem with each other.”

Pacific West Financial Consultants, Inc. joined because the company is on the prowl to recruit more financial advisors, according to its CEO Tony Pizelo. The firm is the RIA sister company to Pacific West Securities, which joined the Protocol last year. Both companies are based in Renton, Wash. and they serve about 317 reps.

“It helps us to bring aboard breakaway brokers who want to do fee and transaction business,” he says.