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Advisors are unsure about how the departures of UBS and Morgan Stanley from the Broker Protocol will impact the industry, according to a new study from Schwab Advisor Services.

Schwab Advisor Services’ Spectrum of Advisor Independence Study surveyed 152 U.S. financial advisors that have considered becoming independent registered investment advisors (RIAs). The data provides insights into the considerations and expectations of these advisors as they evaluate a move to independence.

The report included perspectives on the impact of the Protocol for Broker Recruiting.

According to the study, 43% of advisors currently work for firms that operate under the Broker Protocol. Comparatively, 33% work at firms that do not operate under the protocol, and 24% don’t know.

The study found that there is widespread uncertainty about how the protocol will impact future advisor industry movement, particularly as fewer major firms are signatories.

Advisors in the survey were asked what they thought the impact of the protocol would be on advisor movement, and 66% weren’t sure how what affect it would have. However, 16% thought it would slow advisor movement, while 9% thought it would increase movement and another 9% thought it would have no impact.

“[Advisors] are not sure what that means for their ability to transition,” Tim Oden, senior managing director of business development at Schwab Advisor Services, explained. “I’m quite certain that their current employer is not going to clarify that for them.”

According to Oden, when Morgan Stanley and UBS exited the protocol a year ago, there was a lot of concern that if the protocol went away, it would affect the ability of brokers to move to independence. Signatories to the protocol let departing advisors take essential client information with them.

In January, the Nuveen/DeVoe RIA Deal Book predicted the industry would likely experience a decrease in breakaway activity if additional firms withdraw from the protocol.

According to Schwab’s recent report, though, the protocol has largely had a neutral impact on the move to independence. Advisors were asked if the changes to the broker protocol decreased or increased their interest in going independent, and 66% reported it had no effect. Similarly, 73% of advisors surveyed said the changes to the Broker Protocol had no impact on the timing of their plans to go independent.

Oden also agrees with these advisors, saying the issues of the Broker Protocol were likely “much ado about nothing.”

“The protocol itself didn’t enable or prevent anyone who wanted to move to the independent channel to better serve their clients from doing so,” he said. “We moved people from non-protocol firms prior to the protocol, every year since the protocol was in transition, and we continue to do so even from those firms that decided to exit the protocol.”

An example of one of those advisors is David Jumper, who left Deutsche Bank Private Wealth Management to join HPM Partners four years ago.

Neither Jumper’s prior firm nor his current firm were part of the protocol.

“I was subject to some pretty big non-competes, so for me it was really about how strong and compelling the story was because time was not on my side.”

Jumper knew it would be four to six months before he would be able to reach out to some of his clients.

“That was a big part of my decision-making process,” Jumper said. “I knew that there would be a length of time when I had no contact with my clients.”

However, he added that if the story ‘is strong enough and they see the value add and they understand you’re trying to grow together, then you’re going to be successful.”

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