Hamburger is part of a cottage industry of business consultants, technology vendors and law firms that has cropped up to help advisers make the leap to independence. A critical part of their playbook is the tricky task of invoking the industry protocol, without running afoul of regulations or employment contracts.

Client Data

These advisers take advantage of language in the protocol that releases them from non-solicitation agreements and other restrictions that might otherwise land departing brokers in court. Under the protocol, advisers who move among member firms receive a waiver from employment restrictions, as long as they take with them only five key pieces of client data: names, addresses, phone numbers, e-mail addresses and account titles. The three-page agreement includes what amounts to a legal loophole, allowing new firms to join simply by submitting a one-page letter of intent.

To invoke the protocol, departing advisers typically start planning months or years ahead. They hire an outside lawyer or consultant who sets up a shell company, sometimes in the name of a trusted proxy: “A college buddy or a crazy uncle,” Hamburger says.

That company then joins the protocol. Soon after, typically on a Friday, the advisers resign, take ownership of the protocol firm and work through the weekend schmoozing their clients while their former colleagues do the same, like the dueling sports agents in the film “Jerry Maguire.”

The Morgan Stanley advisers began talking seriously of breaking away two years ago and sped up preparations last fall as they zeroed in on software providers and office space, said 6 Meridian’s chief executive officer, Margaret Dechant. Because brokerage employees aren’t allowed to operate outside businesses without permission, the Wichita team turned to Hamburger to set up a company in advance and register it as a member of the protocol.

Then on Friday, Sept. 9, the group resigned from Morgan Stanley and re-registered ownership of Hamburger’s protocol-member company in their own names.

Within a couple of hours, 6 Meridian was up and running, calls were going out to clients. “The protocol was very important” to establishing 6 Meridian, Dechant says. “We knew if we followed it to the letter, it allowed us to reach out to our clients once we left Morgan Stanley.”

‘Tongue-Lashing’

To avoid alerting their former employer, the group had insisted on strict secrecy throughout the breakaway process. “I got a tongue-lashing from my mother because she didn’t know,” Dechant says.