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3 Best Practices for Rolling Out a Compliant Text Messaging Program

textingDid you know that 98 percent of texts are opened and 90 percent are read within the first three minutes? What’s more, texting has been proven to help advisors close deals faster – research shows advisors saw a 40 percent higher conversion rate when texting a prospect after an in-person meeting.
Few can argue that texting is one of the biggest game changers for improving the advisor-client/prospect experience; 80 percent of financial services firms are either currently using or plan to use text messaging as a key part of customer and employee communications.
But how can organizations open up this powerful channel and ensure compliance? In 2016 alone, there have been more than 11 regulatory disciplinary actions against financial services firms related to unsupervised business communications, which is a major uptick from last year. Without a program and policy in place, advisors are leaving firms at risk.
In a recent Hearsay webcast on how to roll out a compliant text messaging program, guest speakers Yasmin Zarabi, Hearsay Vice President of Legal and Compliance (@yasminzarabi), Bella Tityevskaya, Guild Mortgage Vice President of Compliance and Legal, and Meghbartma Gautam, Hearsay Product Manager (@skyspeak), walked through three best practices to consider when implementing an advisor text messaging initiative:

Best Practice No. 1: Follow the Four Pillars of Compliance

Like any other digital program, texting for business purposes comes with certain risks and responsibilities. Hearsay’s four pillars of compliance (below) provide a framework for firms that want to enable their advisors to engage on digital channels, including text messages. Companies should have a formal written policy that is distributed among its field force and ensure they are trained properly. In addition, firms need to make sure that the program has proper supervision as well as record retention tools in place.
four pillars of compliance

Best Practice No. 2: Assign a Steering Committee

Cross functional teamwork is essential to roll out a compliant program. Bella emphasized that it’s critical to form a steering committee that includes members from IT, compliance, legal, sales and marketing teams. This committee should be involved in both selecting program criteria and vendors.

Best Practice No. 3: Adhere to Attestation and Legal Requirements

Under consumer protection laws, advisors must have consent to text business messages to consumers. Therefore, it’s important to select a technology partner that has set up attestation. There are several laws that need to be considered, including the CAN-SPAM Act, the Telephone Consumer Protection Act (TCPA) and FINRA regulations. Firms should determine the purpose of the message and whether the vendor has the means to comply with the requirements for that text.
The question isn’t should firms allow advisors to text, but rather how can they allow them to do so compliantly. For more information, watch the webcast below and join the conversation using #HSCompliance!

Disclaimer: The material available in this article is for informational purposes only and not for the purpose of providing legal advice.

Myriah Wood

Myriah's background is in both product and acquisition marketing as well as business development.

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