InvestmentNews (February 26, 2018) -- Changes will be pegged to brokers' 2018 bonuses instead of those for 2017. But is this a trend other firms will follow?

Just days after rolling out new non-solicitation agreement requirements linked to 2017 broker bonuses, UBS Financial Services has buckled to pressure and postponed the rule change till next year.

"I think there was a mutiny on the bounty, the inmates were ready to riot, and the optics were really bad," said Andrew Stoltmann, a securities attorney and president of the Public Investors Arbitration Bar Association.

UBS declined to comment for this story, but according to a memo executives at the wirehouse sent to colleagues last Friday, which has been reviewed by InvestmentNews, the firm decided to delay plans for a non-solicitation agreement that would prevent brokers leaving the firm from contacting their former clients for 12 months. The new agreement, which is expected to be closely watched by the broader brokerage industry in the wake of a string of broker protocol exits, will be pegged to 2018 bonuses. The change was first reported by On Wall Street.

But what is being celebrated by some as a victory for brokers is really just a delay of the inevitable, according to Sharron Ash, chief litigation counsel at MarketCounsel, a regulatory compliance and consulting firm.

According to Ms. Ash, UBS is merely "catching up" with its closest counterpart, Morgan Stanley, which exited the broker protocol agreement just days ahead of UBS late last year.

"Morgan Stanley has non-solicit restrictions in place in the employment agreements that they sign on the way in," she said. "At UBS, not everyone had those restrictions. This was a way for UBS to catch up."

Morgan Stanley did not respond to a request for comment.

Part of the dust-up last week at UBS was the way the non-solicit restrictions were embedded into the agreement.

"I would tell advisers, with any agreement put in front of them — whether they are offered a new title, a new office or additional compensation — they better be reading it carefully," Ms. Ash said. "Every single thing put in front of these guys is an opportunity to put greater restrictions on them. This should cause them pause, and they should no longer blindly sign whatever is put in front of them."

Industry recruiter Danny Sarch, views the non-solicit contracts by firms that have left the protocol as the next big test for the brokerage industry.

"The wirehouses that have left the protocol are looking for ways to legally prevent advisers from talking to clients after leaving the firm, because this is shareholder-friendly and firm-friendly, but it's not good for clients," he said. "If UBS and Morgan Stanley see their attrition rates fall dramatically because of leaving protocol and the forming of these non-solicits, I would expect Merrill Lynch and Wells Fargo to follow suit."

Merrill Lynch and Wells Fargo are both still part of the broker protocol agreement. Neither firm responded to a request for comment.