Breaking Up Doesn't Have To Be Hard To Do, Part 2

Published by Investment Executive

Part 1 of this two-part series described the more common types of advisor partnerships and the associated risks (see Part 1 here). In this article, I will describe how to reduce your risks to avoid costly and protracted litigation (funny that this is written by a litigation lawyer).

Advisors usually sign a document directing their dealer to a joint code split after a brief discussion. Rarely is much consideration given about what could change between the partners over time and how the split would be adjusted to reflect their changed contributions.

This article sets out some of the issues to discuss and resolve, preferably before the joint code document is signed, to provide to a corporate lawyer to draft an agreement. The agreement would address the present deal and how to resolve issues in the future.