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Creating a Text Message Compliance Policy for Advisors: 5 Considerations

February 17, 2017

text messagingWe all know that texting is mandatory among next-gen consumers. But did you know that it’s a growing communication channel for advisors, too? According to a recent internal Hearsay survey of more than 1,700 financial advisors and insurance agents, nearly 30 percent of advisors are already sending text messages to their clients.

From a compliance standpoint, are your advisors breaking your policy and putting your firm at risk?

Opening up a new communication channel for advisors isn’t easy, especially for compliance. With regulators paying closer attention to compliance infractions via text messaging, firms need to have the proper supervision over their advisors’ activities on this channel. Similar to opening up social media networks to your firm, in order to reap the full benefits of texting, you must plan and account for compliance and legal issues that could put your company at risk if left unchecked.

Here are five things to consider when opening up this new channel of communication at your firm:

1. Understand your use cases

Given the different content categories, it is important to encourage behavior for approved use cases and create disincentives to discourage employees from engaging in prohibited activities. For instance, a policy can contain rules that only permit advisors to use text messaging in order to maintain their relationship with clients.

2. Determine advisor texting intent

It is worth evaluating how you will enable your field with texting capabilities and adjust your policy according to how it will be leveraged. Provide concrete examples of what is allowed and what is not allowed.

3. Understand different text types

It is important to understand the difference between short code versus long code texting capabilities. Depending on the model you support, communicate the associated state and federal consumer protection laws in your policy.

4. Understand the level of consent required to contact individuals

When conducting business communications via text message, rules may require consent between the consumer and employee before having certain conversations. For instance, customers who have a prior business relationship with an advisor require a level of consent that is lower than a prospect. It is important to know and understand the type of consent that is required for your sanctioned use cases.

5. Record the consent

Once you have an understanding of the type of consent that is needed, make sure that there is a record of consent provided by the consumer. Even if consent can be obtained orally or can be implied by circumstance, ensure you have a corresponding record that demonstrates such consent was properly obtained.

For more on how to create a text message policy for your firm, read our free, comprehensive Texting Policy Guide for Financial Services and check out our webinar on how to roll out a compliant text messaging program.

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


Myriah Wood

Product Marketing Manager

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

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