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Another Big Name Dumps Broker Protocol

January 2, 2018

Citigroup is following wealth management rivals Morgan Stanley and UBS in pulling out of the Protocol for Broker Recruiting, Bloomberg reports.

Effective Jan. 8, Citi will no longer be a signee to the 14-year-old industry agreement that lets advisors take some client data without the threat of a lawsuit, according to the news service. A Citi spokesman tells Bloomberg in a statement that the company is acting “similar to others in the industry.”

The move will supposedly let Citi “continue to invest in our growing team of award-winning financial advisers,” the spokesman tells Bloomberg.

The company’s Citigold service currently has around 1,000 financial advisors and “relationship managers,” a source familiar with the firm tells the new service. Citi’s exit from the protocol was first reported by industry news website AdvisorHub.

Morgan Stanley withdrew from the protocol in October and UBS followed suit in November. By the end of that month at least 18 firms had already pulled out, as reported.

However, close to 1,700 firms remain signees, including Merrill Lynch and Wells Fargo, according to Reuters. And in November executives at Raymond James pledged to remain part of the protocol regardless of the actions of other wealth management firms.

Meanwhile, at least one UBS advisor team said the company’s plans to exit the protocol contributed to their decision to leave the wirehouse, and Morgan Stanley has begun seeking restraining orders and preliminary injunctions against brokers leaving the firm, as reported.

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here.
  • To read the Rwuters article cited in this story, click here.