Merrill Lynch, Smith Barney and UBS have agreed to adopt a new protocol designed to protect client information when brokers defect to other firms.
Under the agreement, a registered representative moving from one participating firm to another is permitted to take limited client contact information, such as name, address, e-mail and phone number. This information may be used to discuss with the clients whether they wish to transfer accounts to the new firm. Use of the information for any other purpose is prohibited.
Personal financial information such as account statements may not be released and accounts may not be transferred without written approval of the client.
The agreement is expected to safeguard client information and protect customers from getting caught up in litigation disputes between firms over broker defections.
The three firms, which together employ approximately 33,000 registered representatives, expect to put the new protocol into effect early in the fourth quarter of 2004. They are inviting all other broker-dealers to sign up to the agreement.