Lido Advisors, a Los Angeles-based advisory firm with more than $42 billion in assets under management, has left the Protocol for Broker Recruiting, which allows advisors some leeway in taking client data with them when they change firms.
Lido withdrew from the pact on May 12, according to JS Held, a global consultancy that administers the protocol.
“Withdrawing from the Protocol reflects where we are as a firm today,” Lido wrote in an emailed statement. “As we focus on growth-minded teams and deepen our commitment to client experience, our membership became less essential. We respect the important role the Protocol serves for our colleagues and competitors, and should that change, we can always reconsider.”
The intra-industry agreement was established in 2004 by UBS, Merrill Lynch and Smith Barney and has since evolved to include over 2,000 wealth managers. In recent years, as advisor movement increased across firms, and particularly to RIAs, firms such as Morgan Stanley and UBS opted out of the protocol. More recently, some RIAs have also left, the latest being Louisville, Ky.-based RIA Centerline Wealth Advisors, according to a Wednesday notice from JS Held.
Ken Stern, the recently promoted co-CEO of Lido Advisors, said Lido would defend its right to retain clients it has built relationships with over time.
“We put a lot of time and energy into the relationships that we have, and the relationships are really good because of all of these things that we provide,” Stern said of Lido’s platform and services. “We will defend vehemently the relationship that we created and the legal construct of which that was created under … and if we’re challenged, we will defend that to the nth degree.”
Stern acknowledged that sometimes a client-advisor relationship “doesn’t work out,” which the firm respects, but that it believes the nature of departures can be challenged if they go against contractual terms.
“If an advisor chooses to leave, of course, you know, fly and be free, as they say. But don’t use our systems,” he said. “Don’t use our process, and clearly don’t conspire to take information that was given to you while employed by us to take and to try and aid you in your future endeavors.”
There has always been a steady stream of lawsuits in the wealth management space regarding advisor breakaways and what are allegedly bad practices in client information gathering and solicitation. Those were initially focused on wirehouse breakaway advisors, but have more recently shifted toward RIA-to-RIA moves.
Just this week, an ongoing legal dispute between Edelman Financial Engines and Prime Capital Financial took another turn, with Edelman claiming that Prime Capital wasn’t complying with a court-ordered temporary restraining order barring it from soliciting Edelman’s advisors and clients. Edelman has also brought charges against acquisitive RIA Mariner, alleging that it sought trade secrets about the firm and its clients.
Mariner, in turn, had brought its own lawsuit against upstart Savvy Advisors for allegations of poaching advisors without “regard to contractual obligation.” In September of last year, an Ohio federal court dismissed that complaint against Savvy Advisors.
In May 2025, Lido filed its own complaint against Meridian Wealth Management and an advisor who had left to join that firm.
In court documents filed with the U.S. District Court for the Eastern District of Kentucky, Lido’s attorneys alleged that advisor Brycen Coward had worked with Meridian leadership to “improperly profit from Lido’s trade secret and confidential information.”
Among the allegations was that Coward, while still working at Lido, had begun accessing client information, including clients gained through Lido’s membership in Schwab’s client referral network.
“The number of files that Mr. Coward accessed the week of June 24, 2024, was approximately four times the number of files that Mr. Coward accessed in an average work week,” the complaint states.
Meridian, which is based in Lexington, Ken., initially fought the allegations, according to court filings. Their rebuttal included claims that Lido did not prove Meridian executives had “consented to” or “requested” the gathering of client information.
The firm’s attorneys also argued that the “identities of the clients holds no independent economic value,” according to one filing. “There is no allegation that Lido’s relationship with the clients is exclusive, and the mere fact that they may conduct business with other investment firms destroys a claims for trade secret protective.”
On April 15, however, the parties agreed to a settlement, according to court documents, but the terms were not disclosed.
On May 7, Lido issued a statement saying that: “In exchange for a confidential, substantial sum from, and other non-monetary terms by, the former employee and the SEC-registered investment advisor, Lido has agreed to dismiss its claims.”
Lido declined to comment further on the specific case.
Meridian did not immediately respond to a request for comment on the settlement.
