Communication is key to building trust which is an essential when it comes to dealing with people’s finances. Customers also expect to be able to make contact and access services across a wide range of channels, at a time that is most convenient for them.
Text messaging has become one of the most effective ways to stay in touch, because delivery rates are high as are open and response rates. Some financial advisors may be tempted to send the occasional text from their personal phone but they do so at enormous risk – both to themselves and to their customers.
New standards in town
Business communication for financial professionals is strictly governed by the SEC and FINRA. Both organizations have issued regulations outlining the proper use of text messaging in a series of regulatory notices. Some of the most prominent notices, “…remind firms of their obligation to retain records of digital communications that relate to their “business as such.”” This notice also reminds firms that it’s their responsibility to train and educate their employees about the differences between business and non-business communications and their policies requiring that any business communication be retained, supervised, and retrievable.
If your company or firm hasn’t outlined any policies for business communication, don’t assume you’re in the clear! Find out whether any rules exist, and if they aren’t yet outlined for your firm, encourage your executives to create a formal policy for the company. It may seem easier to ignore these rules completely, but that could prove very costly for your business.
Financial fines abound
Lest you think that using your personal cell phone to communicate with your clients is no problem, the SEC levied $1.1 billion in fines in 2022 alone. A quick Google search shows many hefty fines placed against firms because their employees routinely communicated about business via text messaging on their personal devices. And while it may seem like these cases are few and far between, we’re seeing fines increase in frequency as more financial advisors begin leveraging text messaging for their younger clients.
So where does that leave you? Do you have to give up on using SMS messaging for your clients? Of course not. You just have to execute appropriately, which starts with a solid SMS communications platform.
Benefits of an SMS platform
Whether you use an online SMS portal or a customizable SMS API, having a separate phone number and device keeps a wall of security between your personal and business communications, protecting your privacy in case of an audit. When promoting discounts or any supplemental services for purchase, these platforms will also help you include an option for your clients to opt out – a requirement for communications in the United States.
These platforms also maintain a record of your conversations, which allows your company to access and archive any text messages, so they can be easily retrieved in the event of an audit. Knowing these messages can be accessed by upper management may also help prevent blurring the line between personal and professional communication and can help you from using off-brand shorthand in your texts. There are many other benefits to using an SMS platform in the financial industry besides maintaining compliance, but for adhering to the regulations outlined for the industry, there really is no better option.
Julia Applegate
Based in Charleston, SC Julia is a Demand Generation Marketing Manager with 6 years of experience in B2B technology businesses and an emphasis on growth and demand generation marketing. Julia is passionate about balancing data-driven marketing with creative campaigns and bringing agile methodology to new companies.