Avoiding or beating the Temporary Restraining Order

The wirehouses or larger firms have highly sophisticated tools capable of recreating a paper trail of an outgoing advisor’s misappropriation of confidential information on the way out the door. This includes tracking email usage, browser history, printer/copier activity, logins, remote access, document access, and uploaded information onto cloud and external storage drives. Below is a non-exhaustive list of conduct that can constitute a breach warranting legal action:

  • Emailing information belonging to the firm to a personal email account or uploading it to cloud storage or removable storage devices;
  • Storing client information on a personal device;
  • Using a personal email account to conduct firm business;
  • Using a personal cell phone number on your firm email signature line;
  • Printing client-related documents prior to resignation that are unaccounted for—i.e., unrelated to a business purpose, unreturned upon termination, unable to be located;
  • Destroying physical files and/or clearing out your office space;
  • Removing client information customarily stored on a shared drive; and
  • Though likely not a breach, unusual activity like remote, late night or weekend logins will create suspicion.

Next, even if a advisor is not actively soliciting firm clients, any retention of firm records will be presumed to be for the purpose of soliciting clients.

It should be expected that the former firm will contact the outgoing advisor’s former clients, notify them of his/her departure, and ask questions about communications with the departing advisor. Below is a non-exhaustive list of conduct that can constitute a solicitation warranting legal action:

  • Contacting clients after termination and asking them to leave the old firm and transfer to the advisor’s new firm;
  • Advertising competitive services/rates/structures directly to former clients;
  • Denigrating the old firm to former clients;
  • Inaction on client requests during employment that would further client’s business with the old firm and take away from a potential transfer to the advisor post-termination;
  • Informing clients pre-resignation about impending departure; and
  • Unusual meetings and phone calls with clients immediately prior to resignation can create red flags.


Determining what types of pre- and post-termination conduct is permissible is dependent on the outgoing advisor’s employment agreement with the firm. To further complicate the issue, firms tend to require their advisors to sign multiple agreements over the years of employment (think joint production agreements, joint advisor agreements, codes of conduct) that quietly update, tweak and broaden restrictive covenants.


We welcome the conversation about removing obstacles but most importantly avoiding letting 20-30% of your current clients be confused about why you made the transition and why they should follow you.

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