Planning A Move? Here Are Some Tips to Keep It Under Wraps

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Pamela Stross is CEO of TruClarity Management Solutions, a company that provides transition and operational support to brokers launching an RIA.

Deciding to break away from your existing firm to start a registered investment advisory firm can seem daunting, especially when you consider that much of your planning is happening while you’re still at your current employer. 

Maintaining a high level of confidentiality until resignation is key to avoiding trouble and potential legal or regulatory action.  Small missteps like sending or receiving messages through your work email account, telling people about your plan, or spending too much time on the foundational work can reveal your plans too soon and make the process more stressful.

Here are some best practices for keeping your move confidential: 

Channel Communications to a Personal Email Address

Receive and send all transition-related messages from a personal account that doesn’t use your name. Ideally, use an email account you have set up for this specific purpose. Ensure that any paper mail pertaining to your breakaway goes to your home and only give contacts your personal phone number.  Finally, do not utilize any company-owned technology for transition items.

Understand the Legal Elements of Your Transition 

While you should be discrete, you don’t want to be deceitful or run afoul of your employment agreements.  Utilize legal counsel that specializes in the breakaway space and heed their advice about what you can and can’t take with you and how to do so properly. They’ll also help you understand what your specific communication protocols after your move.

Office Space Confidentially

You are known in your market, so a real estate search for your name could easily put you on the radar.  Your lawyer, for example, can guide you away from inadvertently creating an outside business interest that could cause you firm or regulatory headaches with the Financial Industry Regulatory Authority. It is best to consult with your legal and regulatory service providers on how to proceed. You may also use a consultant or third-party to do market searches and direct work with real estate brokers/landlords on your behalf. 

Vendor Relations & Non-disclosure Agreements

To ensure complete confidentiality, issuing a non-disclosure agreement (NDA) to all the vendors you are working with is something to consider. NDA’s are a great tool to ensure your vendor is not discussing any information about you or your plans outside of your partnership. These agreements also allow you to have open, honest conversations with your vendor, which not only results in a better outcome for your business, but can bring you peace of mind. 

Keep Your Lips Sealed

When planning your move, don’t tell anyone who isn’t essential to the process. Obviously, you shouldn’t tell your clients. But friends, family, and business associates should also be left out of the loop where possible as they could innocently repeat something or email the wrong account and expose you. 

This one may be the most difficult, but everyone will understand later when you explain why you couldn’t risk breaking industry rules. 

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