Compliance officers of the world unite! The recent election results have the majority of the Washington crowd elated that they will not only keep their jobs, but will have another one to hop to with ease. Not so simple for advisors.

There's been an uptick of "warnings" and people being fired. If you think the ax is coming down on you, it probably is. But, there are certain actions you can take to help ensure you are prepared for the day it does or to avoid it all together. If you are quick enough, it just may miss you all together.

"Harvey" called my office not too long ago in a frantic state. His firm had just issued him an official written warning and the manager subsequently suggested that although nothing was official, he should probably start searching for a new home. Harvey produces about $1 million in gross production with $200 million in assets. We were on the phone for quite some time in which Harvey was able to review with me the specific infraction or two his current firm had cited. Without boring you with the details, there were no reportable offenses, it was more internal policy related. I was frankly surprised they wanted to get rid of such a good producer over nothing.

I named several places that I thought Harvey should look into. "'I just really have no interest in the last three,'" he said. But I remained persistent stating that it's better that you be safe than sorry and that now is not the time to be cherry-picking your favorite. Do it after you have met the various representatives at the firms. Within a couple of days, we were scheduled for six interviews at different firms.

He also hired a high-priced, well-respected attorney. After meeting with the lawyer, Harvey started cancelling a couple of meetings and blowing off a few managers. The lawyer had actually provided him with some very bad advice. "My lawyer said to take a wait-and-see approach and that I should just be patient and see what they say."

I couldn't really believe what I was hearing since the firm had already insinuated that if he didn't leave, they would make him. Head-strong Harvey believed the high-powered attorney over me. I, in turn, checked with a few managers. "Oh no, if you happen to know you may be getting fired, get out first." Well, yeah!

When it comes down to it, now is not the environment to collect a termination on your U5. And if you feel one is coming your way, run and run now. The attorney was being very self-serving by suggesting Harvey wait. Simply said, if the litigation goes on longer, the lawyer can bill more hours. Ultimately the attorney's bad advice can cost big bucks, while severely limiting your choices.

In Harvey's case, he finally began to actively interview again and was doing so at a pretty good clip when the ax came down. He called me from the office one day in a hushed voice but said everything seemed normal. A flag immediately went up with me. "What are you doing in the office? You should be out on meetings and interviews, definitely not there!" Not 10 minutes after we were finished, Harvey's manager came in and declared this day his last.

That changed everything. Out of the six firms Harvey had been interviewing at, two of them went from the offer stage to deciding to take a pass. It wasn't even a matter of waiting to see what the U5 stated. And this is where his attorney's crucial advice of taking that 'wait and see' approach became nearly fatal for his brokerage career. Not only did over half the players leave negotiations, the termination put a hold on anything for the next three weeks. And when half the players went, so did half the deals.

Harvey's six excellent offers went to one great one and that was fine. Numbers for the deal he ultimately took had to be reworked a bit for more on the back end compared to the front end to offset the risk of his termination. All in all, Harvey is happy at his new establishment but maintains that he wished he hadn't followed the lawyer's advice and accepted an offer before his termination.

That being said, Harvey did a lot of things right before the 'big day' as well. Now take some time and learn. First and foremost, keep a low profile and trust me, it isn't always easy to do. Keep your door closed when you are there and the chit chat to a minimum. Schedule as many client meetings as you possibly can to bolster your relationships and help you stay out of the office. If a firm flies you out to corporate headquarters, be sure to spend an extra couple of days and meet with any clients that happen to be in that area.

Get your story straight. There's nothing more damaging than having something unexpected popping up on the U5 and one must take that into account. Make sure the managers you are speaking with know that you are interviewing with firms and that your departure will be quick and imminent. An offer has to be made in a timely manner. Moreover, don't leave any stones unturned!

Interview Everywhere
Don't bring up thoughts of suing your firm to the perspective employer. Some people are so angry about the injustice that has been done them that it's all they can talk about. It is crucial to appear optimistic and display a "time to move on" attitude and not one of revenge.

If you hear footsteps, listen harder. If you think the writing may be on the wall it probably is, so start hoofing it! Understand that nobody's bottom line is more important than the firm's reputation and when new management comes in your job could be at risk, especially if your business mix doesn't match their ideal.

Take all information that you are allowed to take about your clients but nothing more. Make sure you have all your clients' cell phone numbers and that they have your cell phone number. Remove anything of personal nature from your office area. Worst case scenario and you are asked to leave, you probably don't want your secretary or a random compliance person packing up your stuff.

If management asks you to meet for an internal investigation review, ask to have your attorney present. In Harvey's case the firm said no, but it serves as a subtle indication to management that you are prepared to fight it out and are not going to be taken down easily. If you haven't been maintaining your personal notes, now is the time to do so. Keep them with you night and day as they may prove a life saver if your case goes into litigation. Moreover, ask for a copy of your personnel file and give it to the attorney.

Know that anywhere you go is reportable. If you have decided to resign and 'park' your license, know that it must be reported and explained to the new firm as well. All too many times people decide this is their best option and then don't report it to the new hiring firm. It results in you getting in major trouble with regulators for not disclosing key information. It's best to avoid this tactic all together.

It doesn't matter how much business you are doing these days. You are expendable. What does matter is that you see the writing on the wall and recognize that it says 'get out and get out now.

Terminations on U4s are not easily explained and ultimately will decrease your street value, so it's best to find a new home before chaos ensues. In the case of Harvey, it decreased his upfront package by 20% or $200,000. Let Harvey's loss be your lesson.


Carri Degenhardt-Burke runs Degenhardt Consulting in
Jersey City, N.J. For further information, call
201-395-0222 or visit

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