NEW YORK (Reuters) - UBS Group AG’s Wealth Management Americas said on Monday it was quitting a 13-year-old recruiting agreement that ended the practice of suing brokers who quit for jobs at competing firms, following a similar move by rival Morgan Stanley last month.
In an email to the firm’s nearly 10,000 brokers, UBS Wealth Management Americas President Tom Naratil said his priority was for current advisers to increase productivity, “not recruiting advisers from our competitors.”
The agreement, called the Broker Protocol, was struck in 2004 between Smith Barney, Merrill Lynch and UBS, then called UBS Financial Services. It allowed brokers to take certain client information with them to new jobs, which they used to call clients and invite them to move their accounts.
In recent years, the wealth management industry has splintered, and boutique, independent investment firms now compete with the industry’s largest firms for the same brokers and clients.
More than 1,600 firms have signed the agreement, meaning firms both large and small have equal protection to recruit top brokers and their wealthy clients without fear that the former firm will try to legally stop that.
Last year, UBS announced it was pulling back on recruiting, triggering similar reactions at other firms.
UBS will no longer be subject to the protocol starting on Friday, Naratil said.
Reporting By Elizabeth Dilts; Editing by Andrew Hay