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Financial Advisor Update: More Advisors Moving Firms in 2021

By George C. Miller, Partner of Shustak Reynolds & Partners, P.C. posted on Thursday, May 6, 2021.

After an initial, Covid-induced lull, advisor transitions began picking up steam in late 2020 and now have reached record pace. So far this year, more than 4,000 financial advisors have moved from one firm to another, representing an increase of more than 10% over last year and more than any year since at least 2018. As has long since been the trend, most of those advisors are moving to independent broker-dealers or registered investment adviser firms. There also are an increasing number of advisors moving from one independent brokerage or RIA firm to another.

According to Investment News, LPL Financial, Raymond James, and J.P. Morgan led the way in net new advisor gains, adding 422, 93, and 74 new advisors, respectively. Meanwhile, Wells Fargo, Merrill Lynch, and BMO Harris saw the most advisors leave for greener pastures, respectively losing 236, 219, and 215 advisors. Whether moving from a wirehouse into the independent channel for the first time, or from one independent/RIA firm to another, there are a number of pitfalls transitioning advisors must be wary of. What information, if any, can the advisor take? What contractual obligations does the advisor owe the departing firm, if any? Is there a risk of trade secret litigation or other claims that client information is confidential? And are there any regulatory concerns related to the move? These are all questions any advisor contemplating a move should consider with the assistance of counsel.

 

Shustak Reynolds & Partners has been advising brokers, financial advisers, registered investment advisers and others in the financial services industry for 40 years.
We know how to minimize the risk of litigation while maximizing your success. Please call for a complimentary consultation.
We are here to help you make your transition as smooth and hassle free as possible.
Attorney George C. Miller can be reached in the firm’s San Diego office at (619) 696-9500.

 

 

 

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