In this column, Ajamie LLP Partner and RIABiz Guest Columnist Jack Edwards explains that deferred compensation agreements may not be as iron-clad as brokerages claim, leaving an opening for financial advisors to pursue legal action against their former employers to recoup forfeited funds.
Read the Full ArticleWall Street firms have fought for years to keep brokers from leaving by deploying a variety of golden handcuffs and other restraints to cut attrition. Deferred compensation is a favorite of the Big Four wirehouses.
Although deferred compensation is not new, it became more prevalent and punitive after the 2008-2009 financial crisis, as firms sought to stem the exodus of advisors who wanted greener pastures and distance from big brokerages’ damaged reputations.