The breaking news that Morgan Stanley will be withdrawing as a signatory to the Protocol for Broker Recruiting may signal the beginning of the end for the Protocol– at least as it relates to the wire house firms. Will other firms follow suit and start to depart? While there have always been outliers (or those firms who have not signed on), this departure will enhance the significance of non-solicitation covenants in the marketplace because those leaving or joining Morgan Stanley will no longer move under the protective dome of the Protocol. It will be interesting to watch whether other signatory firms move in lock step with Morgan Stanley. Stay tuned.
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