Securities America Frees Advisers to Text Clients

Texting is becoming the public’s communication channel of choice, the firm says, but the common communication pathway presents regulatory and practical challenges in the independent adviser context.

Securities America has launched a new texting option for its financial advisers and securities licensed office staff, with the stated goal of promoting quick, casual communication that “avoids the lengthy process of email or phoning.”

Gregory Smith, Securities America’s senior vice president of supervision, says the new ability to text clients “will help keep the advisers top of mind with their clients.” Advisers began using the capabilities earlier this month. 

“We’ve known for some time that texting would become an important channel of client communication for our advisers,” Smith says. “We concluded our internal research in October 2017. We then had a group of our advisers test the program, which they finished in December. The response was overwhelmingly positive.”

A spokesperson for the firm points out some other firms have recently taken this step, but pretty much only on the wirehouse side of things. According to Securities America, creating this capability in the independent channel is a much more complex and demanding undertaking, given the lack of uniformity among financial advisers in how their offices are structured and the kinds of telecommunications technologies they use.

According to the firm, most investors simply don’t understand the regulations that advisers work within, including strict requirements for recordkeeping of the contents of certain communications with clients. One adviser cited by Securities America says clients “expect to be able to communicate with us the same way they do with their spouse, friend and other professionals.” Yet under FINRA regulatory guidance on texting, text messages must be retained as if they were written or email communications. Hence the emergence of solutions like the one being rolled out by Securities America or Merrill Lynch. The texts are captured with the application and stored in archiving platforms in a manner compliant with FINRA guidance.

Smith goes on to point out that research has shown response rates are higher and response times are lower with text messages, compared to email.

“We’re committed to providing our advisers with the technology they need to build deep and lasting relationships with their clients,” he concludes. “We knew they would need to put texting into their toolbox.”