As the Protocol for Broker Recruiting gets ready to mark its first decade, Dennis Concilla, an expert on the agreement, talks to Associate Editor Mason Braswell about the origins of the agreement, the monster it has unleashed and the possibility of a Protocol version 2.0.
1. Where did the idea for the Protocol come from? People think firms adopted the Protocol because they were tired of lawsuits and wanted to cut legal fees. That essentially was the result, but the reason was people wanted to control the information that departing brokers took from the firms. The upside of Protocol for the broker was if you didn't steal the confidential information, and if you only took a list of the names, addresses and phone numbers, then you wouldn't get sued. In 2004, three big companiesMerrill Lynch, Smith Barney and UBSgot together in a conference room to agree on this. Morgan Stanley joined a few months later. Today there are almost 1,100 members, but the perception in 2004 was that these three firms had created a club. After considering antitrust rules, they decided to say that anybody can join. You had to send a letter to a lawyer in New York to get added to the list. But then the flood gates opened, and it got to the point that the lawyer couldn't handle it anymore. Now the Securities Industry and Financial Markets Association maintains the list.
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