Employee Termination Checklist

HR confirms whether this is a voluntary resignation, retirement, for-cause termination, or reduction in force. The classification drives the U5 reason code, severance treatment, and whether IT access should be revoked immediately or at end of last day.

Pull the CRD record to identify all active registrations — Series 6, 7, 24, 63, 65, 66 — and any state IAR registrations or insurance producer licenses tied to the employee. Form U5 is required within 30 days of termination for any FINRA-registered or state-registered person.

Run a CRM report (Salesforce FSC, Wealthbox, Redtail) of all households where the departing person is primary or secondary advisor. Cross-reference against the custodian's rep code report at Schwab, Fidelity, or Pershing — the two lists do not always match.

Match each household to a successor based on capacity, planning complexity, and existing relationships. Document the rationale — Reg BI and fiduciary obligations don't pause during a reassignment, and the receiving advisor needs to make a fresh best-interest determination on inherited recommendations.

Use the standard exit interview script. Ask explicitly about any unreported customer complaints, outside business activities, or private securities transactions — anything disclosed here may need to land on the U5 disclosure questions.

Calculate final wages, accrued PTO, trailing commissions, deferred bonuses, and any forgivable note balance. Confirm state final-paycheck timing rules — several states require payment on the last day for involuntary terminations.

COBRA election notice must be sent within 14 days of the qualifying event (44 days if the employer is also the plan administrator). Include 401(k) rollover paperwork and HSA distribution options.

Building badge, office keys, corporate card, parking pass, and any printed client files. For remote employees, provide a prepaid return label and require tracked shipping.

Revoke Microsoft 365 / Google Workspace, Okta or Azure AD SSO, the CRM (Wealthbox, Redtail, Salesforce FSC), the planning tool (eMoney, MoneyGuidePro, RightCapital), and reporting (Black Diamond, Orion, Tamarac, Addepar). Termination at the IdP cascades to most downstream apps but verify each one — orphan sessions are a common audit finding.

Schwab Advisor Center, Fidelity Wealthscape, Pershing NetX360, Altruist — each requires a separate termination request to the custodian's service team. Trading and rebalance tools (iRebal, Eclipse, Tamarac Trading) must be revoked the same day to prevent unauthorized trades.

Laptop, phone, tablet, and any home-office hardware. Image the device before wiping — emails, Teams chats, and local files may be subject to a litigation hold or future regulatory request.

Confirm Smarsh, Global Relay, or Bloomberg Vault retains the full mailbox and texting history (MyRepChat, Hearsay) for the SEC 17a-4 / FINRA 4511 retention period. Place a litigation hold if there is any open complaint, arbitration, or pending exam.

Rotate any vault entries the employee touched — Morningstar, YCharts, FactSet, Bloomberg Terminal, Holistiplan, and any Zapier or custom integration tokens. Document who received the new credentials.

FINRA requires U5 filing through CRD within 30 calendar days of termination. Reason for termination, disclosure questions, and any pending complaints must be answered carefully — language on the U5 follows the rep for the rest of their career and is the most-litigated part of advisor offboarding.

If the departing person is an executive officer or 25%+ owner, update Schedule A promptly. Retire their Part 2B brochure supplement and ensure the firm's ADV Part 2A no longer references them as a key person.

State IAR terminations flow from the U5 in most states but a few require a separate filing. Insurance producer appointments must be terminated with each carrier through NIPR or directly — orphan appointments generate continuing CE and renewal-fee obligations.

Walk the employee through any non-solicit, non-compete, and Reg S-P obligations on client information. If the firm is a Protocol for Broker Recruiting signatory, document the protocol-compliant client list (name, address, phone, email, account title) the employee may take.

CCO sign-off on the offboarding file: U5 copy, exit interview notes, any open complaints, gift and entertainment log status, personal trading window closure, and email/text archive confirmation. This file is the first thing a FINRA or SEC examiner pulls when an ex-rep is involved in a later inquiry.

Pull the trade blotter and personal trading attestations for the last 90 days. Look for unusual concentration, principal trades, late allocations, and any front-running flags. Document the review even if clean — examiners ask for it.

True-up trail commissions, 12b-1s, and AUM fees through the termination date. Calculate any forgivable note balance owed back, outstanding T&E advances, and clawbacks per the comp plan.

Close the AmEx or corporate card, cancel Concur or Expensify access, and close any vendor accounts opened in the employee's name (research subscriptions, conference registrations).

Use the firm-approved letter (compliance pre-approved retail communication under FINRA Rule 2210). Introduce the successor advisor by name and credentials and provide direct contact information. Avoid commenting on the reason for departure.

Submit rep code change requests to the custodian for every account in the book. In the CRM, transfer household ownership, opportunities, and open service tasks. Confirm fee billing continues uninterrupted at the next quarter-end.

Prioritize top-tier households and any client with a planning meeting, RMD deadline, or pending trade in the next 60 days. The successor should review the financial plan, risk profile, and most recent Reg BI / fiduciary documentation before each meeting.

Run an ACATS-out report at the custodian 30 and 60 days after departure. Document any departures and confirm the firm's response complied with the non-solicit and Reg S-P obligations on both sides.

If clients followed, compare the outflow list against the protocol-compliant or contractually-permitted client list. Engage outside counsel if there is evidence of solicitation outside the protocol or breach of restrictive covenants.