Citigroup is withdrawing from an industry pact designed to allow financial advisers to change companies without being sued by former employers, further unraveling the accord after Morgan Stanley and UBS Group AG said they would pull out.
“Similar to others in the industry, Citi has decided to exit the protocol,” company spokesman Drew Benson said in an emailed statement. “This decision allows us to continue to invest in our growing team of award-winning financial advisers.”
Bloomberg News reports that Morgan Stanley’s decision in October to defect from the Protocol for Broker Recruiting fueled concerns in the industry that others would depart. UBS signaled its plan to do so soon after. The agreement, signed in 2004, was designed to mitigate lawsuits when advisers left to join a competitor. Almost 1,700 firms have signed the protocol.
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