Mandala's previous firm, Maxim Group, doesn't participate in the protocol, according to a company legal officer.
Many brokers, however, don't want potential new employers to verify their backgrounds with their current firms, even if they're moving between firms that observe the protocol. "It would be a red flag that they are looking to leave," if management found out, Richey said.
One advisor, who left Morgan Stanley for Merrill Lynch last year, said his new employer took what he claimed in annual production and client assets as truth. "I could've fudged my numbers a little if I'd wanted to, and they wouldn't have known. I'm sure that happens all the time," the advisor said.
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