Lido Advisors Withdraws from Broker Recruiting Protocol, Signaling Shift in Client Retention Strategy

Lido Advisors, a Los Angeles-based advisory firm managing more than $42 billion in assets under management (AUM), has officially withdrawn from the Protocol for Broker Recruiting. The move, which took effect on May 12, marks a significant shift in how the firm intends to manage client relationships and navigate advisor transitions within the wealth management industry.

According to JS Held, the global consultancy that administers the protocol, Lido’s departure follows a broader trend of large wealth management entities and Registered Investment Advisers (RIAs) seeking more autonomy over their client bases.

Strategic Rationale Behind the Departure

In an emailed statement, Lido Advisors explained that the decision to leave the pact was driven by the firm’s current evolutionary stage. The firm noted that as it focuses on “growth-minded teams” and seeks to “deepen our commitment to client experience,” the constraints and requirements of the protocol have become less essential to its operations.

While the firm expressed respect for the role the protocol plays for its industry colleagues and competitors, it signaled a readiness to operate outside of its framework. This decision comes at a time when Lido is actively managing its growth and reinforcing its legal stance on client ownership.

Understanding the Protocol for Broker Recruiting

The Protocol for Broker Recruiting is an intra-industry agreement established in 2004 by major financial institutions, including UBS, Merrill Lynch, and Smith Barney. Over the past two decades, the agreement has expanded to include more than 2,000 wealth managers.

The primary function of the protocol is to provide a standardized set of rules for when advisors move between firms. Specifically, it offers certain leeway regarding how departing advisors can handle client data for solicitation purposes. By opting out, firms like Lido Advisors gain greater latitude in defending their client rosters and managing the legal complexities of advisor movement.

A Growing Trend of Opting Out

Lido Advisors is not alone in its decision to distance itself from the agreement. The wealth management sector has seen an increasing number of high-profile firms move away from the protocol as advisor mobility—particularly toward RIAs—has risen.

Notable departures include:

• Morgan Stanley and UBS, both major industry players that opted out in recent years.
• Centerline Wealth Advisors, a Louisville, Kentucky-based RIA that recently issued a notice of withdrawal.

Defending Client Relationships and Ownership

Ken Stern, the recently promoted co-CEO of Lido Advisors, emphasized that the firm is prepared to be aggressive in protecting the relationships it has cultivated. Stern highlighted that the firm invests significant time and energy into building these connections through its platform and specialized services.

“We will defend vehemently the relationship that we created and the legal construct of which that was created under,” Stern stated, adding that the firm will defend its client interests “to the nth degree” if challenged.

Key Takeaways

• Strategic Exit: Lido Advisors withdrew from the Broker Recruiting Protocol on May 12, 2026.
• AUM Strength: The firm continues to manage over $42 billion in assets.
• Client Focus: The departure is intended to support growth-minded teams and enhance client experience.
• Legal Posture: Co-CEO Ken Stern signaled that the firm will vigorously defend its right to retain the clients it has built relationships with over time.
• Industry Context: The move aligns with a trend of major firms and RIAs opting out of the 2004 industry agreement to gain more control over client data and solicitation.