“How embarrassing would it be (for the wirehouses that already exited) if regulators have to impose broker protocol?” @HDelux speaks with @BenjiWriter @newsfromIN

For smaller advisory firms that are more likely to hire away from brokerage firms, there is no downside to joining the protocol, according to Brian Hamburger, chief executive of the compliance consulting firm MarketCounsel.

“The cynic in me says these name-brand firms that are scurrying away from the protocol certainly take a lot of the benefit away from being a member,” he said. “But the firms that are joining are saying, ‘this is the right thing to do.’ I’m a huge believer that clients deserve the protections of protocol.”

“If you start to see a number of legal actions where the broker did everything right, but clients were precluded from getting everything they needed, I think the regulators will have to step in,” he said, recalling the litigation-laden days prior to the original 2004 protocol agreement. “How embarrassing would it be (for the wirehouses that already exited) if regulators have to impose broker protocol?” Mr. Hamburger said.

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