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Investment Advisor Employment Agreement

I hope these are useful lines of thought and reflection on some of the issues that you need to consider when considering leaving your current consulting firm when you are subject to some kind of employment contract with a non-competition clause or a non-appeal. It`s Office Hours with Michael Kitces. Usually, 1:00 p.m.m on the East Coast. As you can see, I traveled this week for phone conversations, so we are here at the airport, but thank you for joining us all and having a great day! But at least that means that as a financial advisor working with a consulting firm, you need to know what your employment contract says. Is there a non-competition clause? Is there a non-demand? Does the non-application have an unreased requirement? If you try to take customers with you, will it be legal to do so? If you need to, you should hire a working lawyer to verify the agreement. Pay an hour for an expert`s time to find out what your agreement actually says, whether it is really binding, whether it is applicable and what your rights as a consultant are. Because labour law varies from state to state, which means that you really need a lawyer in your country who knows labour law and is not competitive and is not granted in your country, because – and I cannot stress it enough – the rules are different from state to state. A trade secret can be considered a particular confidential information. That is, a trade secret is more protected because it derives its value from its secret and is highly sought after and protected by its owner. Imagine Coca-Cola`s recipe as the ultimate example of a business secret: highly protected for both the Coke brand and Coke as the owner. But many consulting firms also have trade secrets, albeit in less dramatic proportions than Coke, and would be inclined to complain if they see their proprietary methods, techniques or processes used by a former employee at a competitor. From the financial advisor`s point of view, this increase in RIA employment contracts, with non-competitive and unsolicted provisions, is a major challenge.

Because it means that if you build your career and customer base with your business and decide to leave, you`ll probably have to start all over again and leave all your customers behind. For some consultants, this may not seem « fair, » especially if the advisor has really done the work to get the client. Because of the challenges of competing, many RIAs, who really want to protect their clients, require consultants to sign an unsubmissive authorization instead. An agreement without a request stipulates that you will not ask for customers directed towards the company`s customer. In other words, you cannot contact any of the customers of your former company to ask them to do business with you after you leave. Because even if they were your customers, they are not your customers. They are the customers of the company. You have signed a consultation agreement with the RIA unit, not with you personally.

You are an investment advisor representative, an IAR of your RIA, which means that you are the representative of the company, because the client is the client of the company, even if you have been assigned as a senior advisor and interlocutor of the client as a relationship manager. I recently decided to leave the RIA, which I was working on, after it became clear that the promised succession plan would never happen, which I understood after hearing your podcast « Financial Advisers Success » with David Grau a few months ago. I always had a very clear customer book that I order within the company, but the company made me sign a non-competition in an employment contract when I joined, where I agreed not to provide financial advice to the company`s customers for a year, even though I had a specific list of clients to contact a week after I left.