It has been nine years since major brokerage firms including UBS and Morgan Stanley left the Protocol for Broker Recruiting.
Rumors are circulating that another large wealth management firm might exit the agreement. One name that has surfaced in those conversations is Ameriprise Financial.
Whether or not Ameriprise ultimately decides to leave the protocol, the speculation raises a broader question: would it meaningfully change advisor recruiting dynamics if the firm did?
To answer that, it helps to revisit the terms of the Protocol and examine how the 2017 wirehouse exits affected advisor movement.
What the Broker Protocol Actually Does
The Protocol for Broker Recruiting was created in 2004 by a group of major wirehouses seeking to reduce the escalating legal battles that had accompanied advisor movement for years. The founding firms included Morgan Stanley, UBS and Citigroup (Smith Barney).
Under the agreement, advisors moving between participating firms can take a limited set of client information without facing litigation from their former employer.
That information typically includes:
- Client names
- Addresses
- Phone numbers
- Email addresses
- Account titles
Advisors cannot take more sensitive information such as account numbers, social security numbers or account statements. The intent was simple: allow advisors to inform clients of their new affiliation without triggering immediate lawsuits between firms.
For more than a decade, the protocol governed much of the industry’s recruiting activity.
The Wirehouses That Walked Away
That dynamic changed in 2017, when Morgan Stanley announced it would exit the protocol.
Soon after, UBS followed, as did Citigroup.
Those departures sparked widespread speculation at the time that the recruiting environment would fundamentally change. Without protocol protections, advisors leaving those firms could face legal action if they took client information.
But in practice, the industry adapted more quickly than many expected. Firms were given more leeway to file lawsuits but in reality did not want to return to the costly pre-Protocol days of widespread litigation.
Recruiting from non-protocol firms did not stop. Advisors continue to move, and large teams continue to be recruited away from the wirehouses. Dozens of large teams have left UBS over the past year without litigation.
The difference has been largely procedural rather than structural.
Recruiting Without the Protocol
In a non-protocol environment, the key issue becomes whether client contact information can be considered publicly available.
If a recruiting firm can demonstrate that client information, such as names, phone numbers or addresses, can be found through public sources or online searches, that information may still be used to contact clients after a transition.
Hiring firms and their legal teams have become increasingly adept at establishing that. So while transitions are more complex, advisors are still moving. Success rates for account transfers have remained the same as prior to Protocol.
Notably, many of the firms that have been the most litigious are still protocol members. Two of the most high-profile legal battles have been launched by Merrill Lynch and Stifel Financial.
Why Would Ameriprise Leave?
If Ameriprise were to exit the protocol, the rationale would likely mirror the motivations cited by other firms that have taken the step. Wirehouse executives said in 2017 that they felt that the Protocol was doing them no favors in terms of making it easier to hire advisors while it was providing protections for small RIAs and other firms that were recruiting out of the firm.
A number of large Ameriprise teams have been leaving Ameriprise, including another billion-dollar team, ClearTrust, that left for NewEdge Advisors in February. The firm has 10,000 advisors and remains a solid option for many but has faced some pressure.
In addition, firms have already whittled away at the protocol’s protections with carve outs for inherited accounts and team agreements that have rendered the Protocol less meaningful than at its founding. The next step is simply withdrawing from the agreement.
Leaving the protocol can create additional friction for advisors considering a move, particularly around the ability to take client information during a transition. In theory, that can make advisors somewhat “stickier” to their current firm.
Firms also frame the exit around protecting client privacy and proprietary data.
For Ameriprise, the speculation comes amid ongoing industry discussion about advisor retention and platform economics. Recent commentary has focused on the firm’s push into proprietary programs, including internal managed account solutions, which some observers view as another way firms deepen advisor ties to their platform.
Would It Matter?
The experience of the past several years suggests that exiting the protocol does not shut down advisor recruiting.
What it does do is change the mechanics of transitions. Firms and advisors must be more deliberate about how client information is obtained, documented and used during a move.
In other words, the protocol can make advisor movement easier—but its absence has not prevented it.
If Ameriprise were to leave the protocol, it would likely add another wrinkle to the recruiting landscape.
But based on what has happened with the wirehouses that exited before it, the broader flow of advisors across the industry would probably continue much as it always has.
