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Newest additions to Broker Protocol

In four-day span in early March, seven companies joined

Tuesday, March 30, 2010 – 5:54 AM by Elizabeth MacBride
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Broker Protocol: Any firm can join the protocol by contacting New York law firm Wachtell, Lipton, Rosen & Katz.

Seven companies joined the Broker Protocol between March 8 and March 12, according to the new list of signatories released last week by Wachtell, Lipton, Rosen & Katz.

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.

This time around, the new firms are Arete Wealth Advisors; Ataraxis Financial; Centennial Securities Co.; Frontier Wealth Management; Medich, Brienza & Associates; NWAM, doing business as Northwest Asset Management; and Waddell & Reed.

Established by the wirehouses to cut down on employment-litigation among themselves, the Protocol has evolved into a tool for RIAs that want to recruit advisors from the wirehouses. Officially called the Protocol for Broker Recruitment, the agreement outlines in detail what a departing broker can do and take with him or her. For instance, client phone numbers are OK: financial statements are not.

If a breakaway broker follows the Protocol to a T, then it is possible for the broker to take his or her clients along on the departure.

The number of signatories has leaped from 380 last November, though the Protocol is growing more complex as a few companies add caveats to their signatures. See RIABiz’s previous story here.

Joining the Protocol is simple, say several lawyers who work on employment-related matters for RIAs. The list of signatories to the Protocol is kept by the law firm of Wachtell, one of the most prestigious law firms in the nation.

To join the Protocol, a firm simply has to call Richard Kim, a partner at Wachtell, to request a copy of the joinder agreement. His number is 212-403-1354.

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