Before Abandoning Protocol, UBS Welcomed Sizable Merrill Producers
Prior to announcing its withdrawal from the Protocol for Broker Recruiting on Monday, UBS Wealth Management Americas was laying out the welcome mat for at least two Merrill Lynch brokers still protected by the pact.
In a previously unannounced deal, the Swiss bank’s U.S. wealth unit hired New Jersey-based advisor Joseph Lauricella, who had spent all but two months of his 24-year career as a registered representative with Merrill Lynch, according to his BrokerCheck record.
Lauricella, a sole practitioner who joined UBS’s Red Bank branch on November 3, did not return a call for comment about his assets under management or production. His website at Merrill listed him as a managing director, the highest-ranking “corporate” title Merrill bestows on brokers, and a source familiar with his move said he oversaw more than $700 million of customer assets.
Brokers rarely lose titles they are promoted into, meaning his m.d. appellation may not signify his current production, but under Merrill’s 2017 compensation plan it denotes two consecutive years in which production credits hit at least $2.5 million or total revenue production in each year of $3.75 million.
On the same day Lauricella arrived in Red Bank, UBS hired recruited Merrill lifer Rod Loewenthal in Northbrook, Ill, and his team of four. The broker, who had been with his former firm for 22 years, confirmed his move but declined to comment on his production or reasons for jumping. According to Barron’s 2017 ranking of top advisors, Loewenthal oversaw $841 million in client assets.
Loewenthal’s team also includes advisor Kevin Kamholz and support staff Elizabeth Mason, and Justin McIntire, according to LinkedIn.
With Morgan Stanley pulling out of the Protocol on October 31 and UBS exiting on Friday, brokers leaving those firms will be subject to non-solicit agreements that the Protocol overrode, making it harder for them to jump-start their practices.
Merrill remains a signatory to the Protocol, which would have permitted Lauricella and Lowenthal to jump to UBS while it was still a member with five pieces of rudimentary client-contact information without fear of being sued for taking proprietary information or violating privacy laws.
Many advisors, lawyers and recruiters expect Merrill to follow its competitors in leaving the pact, which the big firms say has become ineffective as smaller rivals use it to poach top brokers without much traffic going in the other direction.
A Merrill spokeswoman did not reply to a comment on the Bank of America unit’s Protocol plans nor on the departures.
The departures of UBS and Morgan Stanley are putting brokers on guard about potential moves. “Far more attention will have to be given to the nuances of non-solicitation clauses,” said David Harmon, an employment lawyer at Norris Mclaughlin in New York and New Jersey.
Firms recruiting from non-Protocol members also are likely to lower compensation to offset so-called blood money they will pay to fight or settle litigation from competitors seeking restraining orders on their former employees, according to several recruiters.
To offset the increasing difficulty that brokers at non-Protocol firms may have in bringing client assets with them because of contact restriction, some regional broker-dealers and RIAs also may lower front-end hiring bonuses while enhancing back-ends if client-transfer and new-asset targets are reached over time, according to recruiters.