AES International Calls for 'International Broker Protocol'

International financial services organisation AES International has written to industry trade associations and several other international firms calling for the implementation of a 'broker protocol'. Pioneered by firms such as Merrill Lynch, similar protocols have had some success in America, aimed at helping client privacy and the freedom of choice clients have in selecting their financial adviser during a move between firms...

International financial services organisation AES International has written to industry trade associations and several other international firms calling for the implementation of a 'broker protocol'.

Pioneered by firms such as Merrill Lynch, similar protocols have had some success in America, aimed at helping client privacy and the freedom of choice clients have in selecting their financial adviser during a move between firms.

AES Chief Operations Officer John Viney explains that the exigencies of the international marketplace make it very hard for organisations to enforce restrictive covenants and employment restrictions.  As a consequence, AES is a strong advocate of adopting the American approach of voluntarily adhering and implementing a more realistic protocol aimed at protecting the interests of clients, advisers and companies alike.  He stated, 'international advisers are commonly self-employed and have often invested a great deal of time and effort establishing trusted, two-way client relationships - it is only natural that clients may wish to follow their trusted adviser if he chooses to move between organisations'.

Currently, when a financial adviser leaves a financial services firm, both the adviser and the new firm are liable to the original firm. However, upon signing the proposed broker protocol, firms agree to permit the transfer of client information once a client has signed data release forms, in recognition of the time and effort the adviser has invested. The protocol effectively waives any liability that the adviser or new firm may have had to the old firm. There will be specific rules covering what pieces of client information advisers are permitted to take, and full compliance procedures to ensure that no party is unjustly affected.

AES International General Counsel James McLeod commented, 'new model firms such as AES see no reason why those clients who wish to follow their trusted financial adviser between firms should be prevented from this and our own proposition enables our advisers to build highly valuable, portable, business practices.  Client wishes should always come first and firms need to deal with the inevitable risks and issues that arise from adviser movements in an adult and professional matter.'

When leaving a company, an adviser will submit a list of their clients under the assurance that the information is only relating to clients that they are responsible for and they have acted in good faith in compiling the list. This is designed to bring increased transparency and fairness to the international marketplace, and stop advisers that have continuing client relationships being penalised when they move firms.

Chief Executive Officer, Sam Instone commented, 'it is inevitable that advisers will gravitate to those organisations who offer the strongest all-round value proposition but in doing so, the firms they leave need to be protected from indemnity liabilities and other contractual breaches.  Self-styled "international trade organisations" should in my view focus on addressing these type of serious issues to benefit their membership rather than becoming semi-legitimate quasi-distribution networks.'

For more information, or to find out about the services AES International provide, visit their website at http://aesinternational.com

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