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Ready to Text Your Clients and Prospects? Don’t Break These Rules

September 13, 2018

In April 2017, FINRA released Regulatory Notice 17-18, which directly addressed texting in the financial services industry. It stated that text messages, like social media content and email, must be archived.

Despite this regulation, our research has shown that more than 50 percent of advisors are already texting clients, putting themselves and their firms at risk. Texting is one of the most efficient ways to reach clients, which explains why most advisors are doing it – whether their firms’ policies allow it or not.

Advisors have found that not only is texting the most responsive form of communication, but, clearly, customers overwhelmingly prefer it. In fact, 98 percent of texts are opened, and 90 percent are read within the first three minutes. Because regulators are starting to take a closer look at advisor-client texting behaviors, make sure you’re following these texting best practices.

1. Obtain Consent to Text

By law, you must obtain consent to text a client or prospect before you can begin texting them. This is sometimes called opt-in or attestation. To obtain this consent, the first text you send to a client or prospect must be a compliance message that states who you are, that message and data rates apply, and how to opt out.

In order to make sure you get this opt-in right, using texting technology that already has built-in compliance is highly recommended.

2. Text With Care

The casual nature of texting can also lend itself to easily being abused as a channel for spam. If the recipient doesn’t respond to your opt-in text, we recommend following up after waiting the same timespan you would when following up with an email. Remember: they can text “STOP” at any point during the text conversation and this will legally require you to stop sending texts.

If that happens, a proper compliant texting platform should automatically shut off all communication with that contact.

3. Respond in a Timely Fashion

Once your client texts back, it’s usually best practice to respond as soon as you can. This could be difficult to do given you have other tasks at hand and responding back to dozens of client texts daily can seem daunting.

When overwhelmed with a Herculean task, there’s no better way to tackle it than through delegation. Giving your staff members access to your client texts via a team texting console so they can respond to on your behalf is a great way to address this. That way, if you don’t have time to respond to a text, your staff members can.

4. Follow Your Firm’s Communication Policy, Privacy Rules and Standards

This best practice might seem like common sense, but many professionals often unintentionally throw policies and rules out the window when texting, due to its casual and quick nature. When looking to invest in texting compliance technology, you should consider one that has built-in text blocking functionality that will prevent you from sending certain words.

If you’re a Hearsay customer, join us for this month’s advisor webinar, “Optimizing Your Mobile Efforts,” on Tuesday, September 18, 2018, at 8am PST / 11am EST / 4pm GMT to learn more about the latest in mobile advisor communication, how it is an essential part of your business, and how Hearsay Relate can help you solve these business problems. Leave with action items that enable you to get the most out of your digital communication channels.

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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Linh Le

Customer Education Manager

Linh Le creates training resources and educational content to help Hearsay’s customers succeed. You can follow her on Twitter at @HSSLinh where she tweets about the financial services industry and the state of social media.

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