You’ve been termed now what

Jodie Papike (CEO of Cross-Search) discuss the best action to take for an advisor who just got termed from their Broker Dealer. Below is a transcript of the video.

Welcome to Cross Search. I’m Jodie Papike. As I’ve mentioned before, the goal of these videos is to really help advisors for a lot of different situations that they may encounter. And to bring up topics that we’ve experienced with advisors. The topic today that I wanted to chat about is something that I’m very passionate. It’s something that I hope advisors never have to experience. But if they do, I want them to be informed and have power and how to control their destiny on a go forward. And that is if an advisor is terminated, how they should handle the next steps. So obviously, no advisor wants to be put in the situation of finding out that they’re being terminated. But because all I do is talk to advisors all day in different types of scenarios, I know that termination affects a lot of advisors. And unfortunately, Unfortunately, when an advisor finds out they’re terminated, a lot of times advisors, because they’re shocked, they just freeze, and they don’t know what steps they should take. So in that situation, I’ve seen a lot of, as you can imagine, worst case scenarios. I’ve seen advisors that go down the road with a firm that has really strict policies on who they’re going to take from a compliance perspective and candidly waste weeks of time thinking they’re going to join a firm that ultimately, once that firm finds out the details of the termination, they’re never going to take that advisor.

So that person has wasted weeks of valuable time and precious time exploring an opportunity with a firm that they’re never going to be able to join. I’ve also seen advisors that talk to firms and don’t necessarily provide all the information to that new firm because they may not even know all the information about what happened. And they go down the road, they go to a firm, they haven’t disclosed everything, and details come out after the fact, after they’ve joined that firm. And unfortunately, if it’s details that the firm they’re joining didn’t know about and they’re uncomfortable with, then I’ve seen advisors have to change firms twice in a very short period of time. So today, I wanted to bring forth some information that I hope can help advisors avoid those worst-case scenarios and to help them land back on their feet with a quality firm and get back to servicing their clients. So the first tip that I would give advisors is if you find out that you’ve been terminated, get very detailed information about what happened. You may know, but it’s always really important to find out from the firm’s perspective what they feel happen and why they’re terminating you.

And on that call where they ask you or they’re telling you that you have to leave, ask very specific questions. The first thing is, what is going to be disclosed on your record? There’sdifferent ways that a firm can mark on an advisor’s CRD. There’s four different ways they can mark it once they’re having someone leave. It can be a voluntary resignation, which is when an advisor is leaving on their own. So under this scenario, that wouldn’t be marked. There is a permitted to resign, which Which is a nice way of a firm saying, we’re typically going to give you some time, you can leave, but it’s not something that typically happens. You don’t have to leave right away. And then worst case scenario is a full termination. And then a firm can also mark the box other. With permitted to resign termination and other being marked, the firm also has to disclose why that advisor is leaving. So that’s really where you need to focus in on is what language is the firm going to mark on there? That is what’s going to be disclosed to regulators, and that’s what the new firm that you’re joining will want to know about so that they can know more about those details so that they can defend you in the future if they are to bring you on.

Also, expect that based on that language, you will also, at some point, receive a letter from FINRA. So my second tip is relating to how to deal with all of this and potentially how to deal with regulators down the road. And that is, if you’re If you’re not getting clear information from the firm that’s terminating you, you really need to hire a very good and knowledgeable securities attorney. And I emphasize securities attorney because you really want to be working with someone that knows how to navigate these details with a firm. They have to know the right people to talk to, and they have to know how to get the right answers. They also need to be knowledgeable and have experience in negotiating the language that a firm is going to mark on your CRD. Because once a firm tells you you’re being terminated, they have 30 days to file the CRD. And within that time, there’s typically some negotiations that take place on the language that they’re going to mark. If you’re not able to negotiate or you’re not able to get clear answers as to what they’re going to put on there, you need to hire a securities attorney that’s going to represent you well and is going to negotiate that language on your behalf.

The third tip is talk to multiple firms. Don’t just rely on a firm telling you that everything is going to be okay, especially if you’re working with a recruiter at a firm and not necessarily a smaller firm, where maybe you’re talking to the owner of the company that’s assuring you that they’re going to be able to bring you on. You are talking to a recruiter and they’re telling you things are going to be okay, just know that sometimes over promising takes place. And I always hate to see advisors rely on one option that they want to go to without having multiple options available to them. So always speak to more than one firm and have backup plans if the firm you’re talking to are most interested in ultimately says no to you. Those are the types of things that we help advisors with if they’re in these unfortunate circumstances. We are very passionate about helping advisors when they’re in very tough situations. And that’s because we’ve helped amazing advisors that have had things bad happen to them land on their feet and have very successful careers after a termination. So, hope that was helpful. If you ever find yourself in a tough situation where you need help navigating the marketplace, we’d love to chat with you.


Jodie Papike

Jodie Papike is the CEO & Managing Partner of Cross-Search, the first third-party, independent broker dealer advisor and executive placement firm. Since joining Cross-Search in 1997, Jodie has been consulting with financial advisors transitioning to new independent broker dealers, guiding them through the entire process of identifying their most appropriate options, negotiating a deal and transitioning clients. Jodie has an intricate knowledge of the securities industry and a deep understanding of each of the major independent broker dealer firms, enabling her to help advisors find and transition to a broker-dealer that best suits their needs. Cross Search has placed thousands of advisors, producing more than 375 mill. in gross dealer concessions. Jodie takes the utmost pride in finding a firm for an advisor that will not only better their career, but will also be a good home for them for years to come. Jodie is a frequent speaker at industry conferences, is regularly quoted and published in publications such as Investment News, Registered Rep, Financial Planning, Life Insurance Selling and Advisor One. Jodie earned a Bachelor of Arts degree from San Diego State, graduating with honors.