A financial advisor dilemma: Responding to texts


Financial advisors give their clients many options for reaching them, from office phone numbers, to email addresses and cellphone numbers.  But in some cases, giving clients their cellphone numbers opens the door to another avenue of communication that advisors are not prepared to use: text messaging.

"Around a year ago demand really started coming from our customers saying, 'our clients are texting us and we can't reply.' It was purely a compliance concern to start," said Steve Garrity, chief operating officer and founder of Hearsay Social, a social media, Web, email and now text message marketing and communications company that has a particular focus on working with financial advisors.

The company found that many of the financial advisory firms that it was working with for social media, Web and email communications did not have a system in place to allow advisors to send out compliant emails. Meanwhile, advisors' clients, who may not have time to speak on the phone, or may not always be in an environment where they can talk on the phone, were increasingly reaching out to their advisors via text.

The compliance concerns for advisors range from meeting basic archiving requirements, to complying with a variety of other financial and communications related rules. Compliance priorities include ensuring that customers "opt in" to receive text messages, and screening to make sure that promises of future performance are not being made through text.

"We looked at this and said there is a lot we can do to help our customers here," Garrity said.

Hearsay Social first began exploring the regulatory issues around outbound text messaging by advisors early last year and launched a solution into the market in November.

The outbound texting requirements vary widely firm to firm, with many firms having different policies, such as different requirements regarding what constitutes "opting-in" to a text message, Garrity said. In addition, some firms look to screen for things like inappropriate language. For that reason Hearsay's messaging solution always begins at the corporate level, working through a policy conversation with a firm's compliance team. Hearsay said it works with advisory firms that range in size from the very large firms, to smaller firms as well.

Once a firm has finalized the compliance configuration of its texting system, advisors can just download their firm's app to their Apple or Android phone from an app store. Advisors can then communicate with clients using a messaging app that archives communications and is fully compliant with their firm's policies.

Advisory firms can adopt the text messaging platform as a standalone service or with other products as part of an integrated digital communications and marketing solution. In the months since its launch, the company said interest has been strong.

"It's probably our fastest growing product in terms of customer interest," Garrity said.

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