Yesterday I ran a post aimed at businesses in general, on the potential dangers in partnerships, whether folks "partner up" through an actual partnership, as co-owners of a corporation, or members of a LLC. Today, my south Florida lawyer buddy Marc Dobin posted about this same topic, highlighting some other issues for stockbrokers on his blog (if you're in the securities industry, you should also follow Marc's blog (in addition to BDLawBlog.com), so go ahead and put it in your reader or RSS feed).
Marc's comments are spot on, as he raises some good points for brokers to consider when they team up, either through going into business together, or just forming a joint rep. code with their broker-dealer. Broker teams break up all the time, just like other businesses do, and proper planning can save a lot of time and money down the road. Brokers considering these options should look at the issues identified in my earlier post, as well as those raised by Marc. And, they should also consider and plan for regulatory issues that might affect their ability to continue on in practice (state registrations, regulatory actions, etc.) as well as for whether brokers will be able to continue to run business under their own individual rep. number, and if so, how, when and why. The final point I'll make here is that a boilerplate agreement for a joint rep. code that your firm uses might not be enough for your situation, and that might be something you need to discuss with your broker-dealer and with your lawyer. Be sure to supplement that document with an additional written agreement where appropriate.
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