Breakaway Advisers

There are many reasons why a financial adviser might decide to perform a lift out or otherwise "break away" from a broker-dealer or investment adviser — even when they have a strong relationship.

California Attorneys Offering Legal Counsel Transaction Support

JLG understands that financial advisers may seek more independence and greater financial rewards. However, with greater independence often come more responsibilities, including compliance oversight. JLG helps you to address these challenges. We will provide you with the tools and solutions you will need to take your career to the next level and help you to avoid unintended consequences.

Contact us online today to learn how we can help you.

Performing A Lift Out: Breaking Away From A Broker-Dealer Or Investment Adviser

Should you start your own investment firm? Or should you become an independent representative of an existing independent broker-dealer (BD) or registered investment adviser (RIA) instead? The answers depend on whether you want to get rid of the "back office" entirely and are willing to take on the extra workload required to become completely independent. Whether you prefer to oversee administrative functions, such as operations and compliance, or have someone else do that for you is just one consideration. JLG helps clients to evaluate these and other factors and considerations prior to performing a lift out or breakaway.

Jacko Law Group advises clients throughout the United States on legal issues and considerations involved with leaving one employer for another or venturing out as an independent.

Services For Breaking Away From A Broker-Dealer Or Investment Adviser

For those individuals seeking to transition or lift out from a broker-dealer or investment adviser, we advise on the effects of breaking away and provide counsel on every step in the business formation process. Services our lawyers and supporting team of professionals provide include:

  • Evaluation of current employment or independent contractor agreements
  • Discussion of SEC, FINRA and state regulatory considerations
  • Choosing an association model
  • Finalizing your business plan
  • Selection of a business structure (LLC, S corp, etc.)
  • Setting up entitlement to Web CRD and IARD systems for registration filings
  • Assistance with the completion of Form BD or Form ADV, Form U-4 and other required forms for your association model
  • Creation of client disclosures, including privacy notices, offering memorandums, marketing disclosures, etc.
  • Preparation of client agreements, including financial planning, investment management and family office services agreements
  • Preparation of written policies and procedures
  • Processes for purchasing E&O insurance for your business
  • Assessment of compliance and operational requirements
  • Interacting with broker-dealer custodians, prime brokers and/or clearing firms
  • Enhancement and testing of various internal controls

We also provide ongoing counsel and advice regarding day-to-day operations, tax issues, regulatory proposals, rule changes and more.

Avoiding Legal Ramifications When Transitioning Out Of A Broker-Dealer Or Investment Adviser

Will you face a lawsuit if you perform a lift out from your broker-dealer or investment advisory firm? How do you solicit clients without violating your noncompete agreement? Can you contact your clients to tell them that you are transitioning or breaking away from your firm?

Our managing partner, Michelle L. Jacko, has written papers on various legal and regulatory considerations for breaking away and how to avoid potential lawsuits. Her knowledge on this topic is widely recognized among financial advisers, attorneys and other service providers throughout the United States. Let our attorneys guide you through the labyrinth of considerations as you perform a lift out.

Contact A California Attorney

Transitioning to an independent BD or RIA, or creating your own investment firm is a major step. For more information or to speak with a securities attorney, call our law office directly at 619-298-2880.