Morgan Stanley’s action this month to pull out of the broker recruiting protocol immediately triggered speculation about other firms possibly pulling out and predictions that advisors would suddenly be subject to more litigation if they strayed.

In reality, there may not be much impact. Protocol or no protocol, many outside observers expect brokers to move around just like they always have—and their clients will follow just as they have in the past.

Lawyers and recruiters note that before the birth of the protocol in 2004, brokers moved all the time.

“The vast majority of pre-protocol moves did not result in litigation,” notes David Gehn, a lawyer at Ellenoff Grossman & Schole in New York. “So I don’t think we’ll see a flood [of litigation] at all” now that Morgan Stanley has pulled out.

Morgan’s move is “much ado about nothing,” added Tim White, a managing partner at Kaye/Bassman Intl. Corp., a recruitment firm. “I don’t think it makes any difference. If firms want talent, they’re going to find ways to get it, [and] clients can do business with anyone they want.”

Pat Burns, another attorney who is active in the recruitment wars, thinks Morgan Stanley may be able to slow some departures. But brokers are still free to jump ship, he said. “If they want to leave, they will leave.”

And with Morgan (and maybe other wirehouses) pulling out, the pastures at competing firms might seem even greener.

“I could see [other wirehouses] following Morgan Stanley, but boy, that would be a great PR opportunity for other firms” that stay with the pact, said Matt Sonnen, founder of PFI Advisors, which consults to breakaway advisors. He points to Raymond James’s announcement that it has no intention of leaving the protocol, and he is encouraging the RIA firms he works with to use the news as a recruiting tool.

Perhaps the biggest change since 2004 that could make protocol membership less important is that people are much easier to track down, thanks to technology.

“In 2003, in the pre-protocol days, when clients called Morgan Stanley they’d hear that [their advisor] left, and we don’t know where they went. That was a pretty good roadblock,” Sonnen said. “Now, I can call [my advisor] on my cell phone.”

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