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The Brave New World of BYOD: Managing Advisor-Client Texting

According to Forrester, more than half of North American companies are developing BYOD programs in response to workforce demand.
For IT teams, the first step toward a comprehensive BYOD program is ensuring security and compliance protocols are in place. When BYOD first emerged as a compelling option at large enterprise firms, these were somewhat solved through Enterprise Mobility Management (EMM) providers that helped deliver a secure workspace across mobile devices, apps and content management. It started with emails and progressed to broader business application access.
But now that texting has become an increasingly common and expected communication channel between advisors and their clients, it’s a priority for IT teams to integrate texting compliance and supervision into their BYOD strategy.
Hearsay research has found that more than 50 percent of advisors are texting for business purposes, and for good reason: The average text response time in financial services is 2.9 minutes, and 80 percent of clients opt-in to receive texts from their advisors, according to Hearsay data. Compare that to business email, with a median response time of 1.78 hours.
Yet, only 61 percent of firms have rolled out some kind of texting functionality for their advisors, according to research by analyst firm Aite Group – which means a significant number of advisors are texting without supervision.
The acceleration of potentially unsupervised advisor-client texting puts firms at risk, given the Financial Industry Regulatory Authority’s (FINRA) heightened scrutiny over electronic advisor-client communication compliance. “Electronic communications” cases resulted in the third largest amount of fines assessed by FINRA in 2017, followed by “books and records” (failure to preserve records) cases.

Collaboration Among IT, Security and Compliance

A successful advisor-client texting initiative – as part of a broader BYOD program – requires close partnership among multiple teams, with IT, security and compliance as some of the most critical stakeholders. This collaboration will ensure that the company upholds its security and compliance defenses while providing advisors the tools they need to be more productive, engage with clients where they want to communicate and drive business forward.
Things to consider when developing a BYOD-based texting program – and choosing a technology solution to enable advisor-client texting – include:

  • Compliance supervision workload: Will this exponentially add more work to your current supervision teams? Are there features that enable supervisors to monitor texts more efficiently – like the ability to see full text conversations in one view – and block non-compliant ones before they’re sent?
  • Separating business and personal: How can you ensure the separation of business and personal texts on one device, to address employee privacy and security concerns?
  • Data into CRM: How can the enormous amount of engagement data being captured via the texting channel help optimize CRM projects and efforts?
  • Ease of use: In addition to addressing corporate compliance, is the technology intuitive and easily solves the challenges your advisors have today? If the technology isn’t easy to adopt, your advisors won’t use it – and your firm will still be at risk.
  • Advisor education: What is the best way to train advisors on texting etiquette and best business practices, and decrease the potential for inappropriate usage?

For more information on advisor-client texting in a BYOD world, visit Hearsay Relate.
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The New Regulatory Focus in Financial Services: Texting

Prudential. Cetera. Allstate. Thrivent. Modern Woodmen of America. They’ve all recently empowered their massive field force of advisors and agents to text clients and prospects.
As the trend continues to accelerate, regulators are watching with increasing scrutiny.
FINRA released Regulatory Notice 17-18 last year, which reaffirmed the requirement that financial services companies archive business-related texts in the same way that they would email or written communication, as required by SEC Rules 17-a3 and 17a-4, and FINRA Rules 4511 and 2010.
This essentially means that regardless of your company policy, an audit of your advisors’ texting activities could be requested.
It’s not just FINRA and the SEC. According to an August 2017 study by the Institute of Legal Reform, litigation of the Telephone Consumer Protection Act (TCPA), a law that regulates commercial text messaging, has increased by 46 percent since July 2015; of that number, nearly 36 percent of all TCPA litigation target the financial services industry.
The consequences of this can be severe: Liability under the TCPA ranges from $500 to $1,500 per text message, which can quickly add up given the volume of texts and the size of most advisory sales teams.
A growing number of regulatory actions regarding advisor texting in just the last two years should put all compliance leaders on high alert. Here are some examples.

  • In May, FINRA fined and suspended an advisor who sent hundreds of texts about securities to a person who was statutorily disqualified from the brokerage industry, without seeking or receiving his firm’s prior written approval. This prevented the firm from supervising those communications.
  • FINRA fined and suspended a Texas-based broker for unapproved securities-related communications with two customers via text, in violation of the firm’s policy. The firm did not capture, review or retain the broker’s text communications.
  • FINRA fined a Georgia-based firm $1.5 million for, in part, failing to archive approximately 1 million texts sent using firm-issued mobile devices. Evidently, the firm had a “no texting” policy that several employees violated.
  • That same month, a New York-based advisor was fined and temporarily suspended for using a mobile device to text customers without the firm’s knowledge. The firm did not review or retain any of the text messages.
  • A New York-based advisor was fined and given a 60-day suspension for sending business-related texts to a customer on a non-firm-issued smartphone, in violation of the firm’s policies. As a result, the firm was not able to supervise or archive those communications.
  • Additionally, the SEC alleged an investment advisor sent false and misleading text messages to induce a client to make a risky transaction.

With this heightened focus on non-compliant texting, it’s only a matter of time before regulators begin enacting penalties on larger and larger financial services companies. Forward-thinking firms must invest in compliant texting technologies, such as Hearsay Relate, now to prepare for the inevitable – while also making sure current compliance and supervisory processes remain as efficient as possible.
Disclaimer: The material available on this blog is for informational purposes only and not for the purpose of providing legal advice.
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Email Marketing, Social Media and You

Email marketing may seem like old technology, but it’s far from out of the game in terms of importance. The Understanding Financial Services Email Marketer in 2018 study found that over half of financial services marketers are using email marketing to promote their businesses. It’s also estimated that 49 million emails are sent by financial services companies per month, with customers receiving on average three emails monthly.

Email continues to bring value as a marketing tool because of its unique ability to create valuable personal touchpoints at scale. In the financial services industry, this is key. The ability to have meaningful, high-touch connections with your clients is crucial to building and maintaining relationships. Money is an intensely personal subject, and advisors need to prove their commitment to their clients’ financial success with every message, every meeting, every email.

4 Email Marketing Best Practices

1. Personalize
Customers are more likely to open emails when their name is in the subject line and/or mentioned in the body. It makes the email experience seem more engaging and authentic and less like a robot sent them a message. In order to make your email stand out amongst the thousands of other emails that clients receive, personalizing it is the right way to go. It is important to invest in an email program that lets you personalize emails at scale.
2. Automate
Schedule your emails in advance and automate the sending process. If you frontload the work of sending and scheduling emails on Monday, then you have time for the rest of the week to focus on other high-value tasks. Automating also ensures that you maintain a consistent level of contact with your clients, which helps to build your relationship with them. You won’t have to worry about whether or not you’re sending a happy birthday email to each of your clients on his or her special day; a good automation program ensures it.
3. Mobile-Friendly
According to Email Client Market Share Trends, 46 percent of all emails are opened on mobile devices. Make sure your email is easy to read on a phone and that your messaging is concise and clear. Test your email content by sending it to yourself first to view it on your phone. Ask yourself: Would you read this email if you were busy and on the go? How does it read? Is the most important information at the top? Is it engaging? Another important thing to keep in mind is whether your images, such as logos or professional portraits, are appearing correctly.
4. Consistent with Social Presence
It is important to ensure that your tone in your email efforts is consistent with the content you’re posting on social media. By making sure your brand and behavior are the same across the board, you’ll present a consistent, reliable presence that your customers and prospects will grow to know and trust.

Email Copy Best Practices

1. Subject Line
Personalize your email subject lines and ensure that they 1) have less than 50 characters, 2) create a sense of urgency, and 3) pique the interest of the reader.
2. Body
Make sure the body of your emails are concise and clear, and that the point of why you sent the email is easily understandable “above the fold.” “Above the fold” once referred to any content that appeared on the top half of the front of a folded newspaper. Content had to be catchy and interesting enough for people to want to buy and continue reading. Nowadays, it means anything that’s not cut off by the bottom edge of a computer or phone screen.
A call to action is what you’re trying to get the reader to do after reading the email. It could be clicking a link to a new blog post, scheduling a new meeting, or a request to follow you on social media. Whatever action you hope to encourage, your messaging must be clear from the get-go, or your recipients will most likely lose interest and stop reading.
3. Cadence
Coschedule.com aggregated 10 studies on email marketing in order to find overall recommended times and days to send out marketing emails.
The studies show that the best days to send emails are on Tuesday through Thursday (Tuesday being the best, Thursday being the second best, and Wednesday being third best). The best times are 6am, 10am and 2pm, and between the hours of 8pm and 12am. Because these are averages and studies conducted across several industries, we highly recommend you test different times and date combinations to see what works best for you. Experiment, experiment, experiment … and then stick to whatever combinations work best for you and your client base.
4. 1-to-1 Outreach
From personalization at scale to automation via email campaigns, Hearsay’s 1-to-1 Outreach feature (part of our Advisor Social solution) allows financial advisors and insurance agents to email their prospects and clients easily, efficiently and effectively – with the right message at the right time – in a way that drives sales.

If you’re a Hearsay customer, join us for this month’s advisor webinar, “Email Marketing, Social & You,” on Tuesday, August 21, 2018, at 8am PST / 11am EST / 4pm GMT and learn how to combine your efforts on social media and email marketing to expand your overall automated workflows, content channels and other best practices can optimize your digital communication. We will cover the importance of using social and email to meet your customers and prospects where they are, and make tangible gains for your business. See you there!
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