Bernie Clark, executive vice president and head of Schwab Advisor Services, predicted that Morgan Stanley's decision to exit the broker protocol would backfire on the giant wirehouse.
The protocol is a voluntary agreement that lets brokers take client contact information when they move from one protocol signatory to another. It was designed to reduced litigation between firms and brokers and minimize negative client experiences. About 1,700 brokerage firms are signatories.
Clark was interviewing Charles Schwab & Co. CEO Walt Bettinger, who agreed with his analysis of Morgan Stanley's decision.
Responding to a question at Schwab's Annual Impact conference in Chicago this morning, Clark said the move was nonetheless expected. Furthermore, he predicted other wirehouses probably would follow Morgan Stanley's lead. Clark also predicted the move could accelerate the exodus from Morgan Stanley and those who might follow it.
"Ever try to lock somebody down?" Clark asked rhetorically, implying he thought the move would elicit a negative reaction from many wirehouse reps.