Texting your clients? Read this first

Compliance concerns are paramount when adding texting to your communications mix

Jul 15, 2019 @ 5:40 pm

By Dusty Russell

Are you texting your clients? Do clients text you? Are you sure you know the answers to these questions when it comes to your staff?

If you haven't added texting as a component of your firm's communications mix, perhaps it's because you believe texting is only applicable for millennial clients and prospects. While it's true that "sending and receiving text messages is the most prevalent form of communication for American adults under 50," statistics indicate even those over 55 average 500 text messages a month. In other words, virtually everyone texts these days, and they want to be able to do so with you.

Still, as an adviser, there are concerns about texting you must take into account before you can dive in and begin communicating with your prospects and clients this way. Below are some dos and don'ts to keep in mind.

(More: Cybersecurity concerns over messaging apps grow as more firms enable adviser texting)

Compliance dos and don'ts

A recent risk alert from the Securities and Exchange Commission on firms' responsibilities related to electronic messaging suggests that firms "remind advisers of their obligations when their personnel use electronic messaging" and also "review their risks, practices, policies, and procedures ... and to consider any improvements ... that would help them comply with their regulatory requirements." Texting with clients is always subject to compliance, so:


• Use an SEC and Finra-compliant texting platform to communicate with clients.

• Control the environment and lead by example. Keep it primarily business-related in this communications channel and refrain from sending or replying to messages inappropriate for the medium.


• Assume your staff isn't texting clients. This won't protect your firm if they are texting and Finra comes calling. Similarly, don't rely on a no-texting policy to protect you, as Finra does not consider that a defense.

• Make recommendations via text. Otherwise, you are potentially setting yourself up for suitability claims. Save those conversations for channels where your recommendations can be explained in depth and with context, and documented fully.

Use channel-appropriate etiquette

Texting has its own set of generally accepted norms. Be aware of these and practice them so you don't create a bad impression.


• Reply as promptly as possible. Texting with clients works because it allows for an almost immediate response time. Give your clients the same level of attention by being available when they text. Texts can be forgotten if we don't answer them quickly.

• Be careful when using internet or texting abbreviations and acronyms — not everyone stays up-to-date on all of these. "LOL" may be dictionary-worthy at this point, but once you move beyond abbreviations with everyday widespread usage, you risk alienating your recipient by sending them a message they don't understand.

• Know your audience. Emojis are fun and can be used to clarify the tone of a potentially ambiguous word or phrase, but they aren't for everyone. Use where appropriate but aim for clarity with your words rather than relying on emojis to convey your meaning.

• Think outside the box, be creative with texts (birthday and anniversary greetings, invitations to social events you are hosting or attending, etc.). Texting shouldn't be limited to appointment confirmations and reminders.


• Text anything that's too complex. You can, however, alert your client via text that you have emailed or physically mailed something of this nature so they can be on the lookout for it.

• Deliver bad news via text. You should never allow anyone in your office to use texting as a distancing tool for bad news. Set up a meeting or a phone call for those situations.

• Text at the wrong times — avoid dinner hours, overnight and holidays. In this regard, texting is like telephoning; don't text someone when you wouldn't appreciate being disturbed yourself. Also, keep the client's time zone in mind.

Keep it simple for your clients

Compliance concerns are, of course, paramount when adding texting to your communications mix. And, having a good grasp of texting etiquette should be a requirement for all of your staff members prior to launching your texting platform.

But, with those considerations in hand, an overarching consideration on your texting "Do List" must be to make it easy on your clients. In fact, make it seamless. They shouldn't have to use anything other than their default texting app for text conversations with you. If any heavy lifting in this regard is required, it should be done on your end. Platform fatigue is a real thing for many people, and you should never expect clients to adopt a new platform to perform a task they are already quite comfortable with on an existing platform.

Bearing all of the above in mind, you should be able to pick between the compliant texting platforms now available, meet your clients' desire to text with you where appropriate and ease your concerns (compliance and otherwise) about texting as a viable means of client communication.

Dusty Russell is relationship manager at Redtail Technology.


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