When No-Texting Policy Impacts Client Experience it’s Time to Get Compliant

By Global Relay on August 25, 2020
Global RELAY 



Imagine you’re sitting in a coffee shop and a client sends you a text message asking you a simple question. You know the answer, but you don’t respond because your firm has a strict no-texting policy. Your client can’t take a call and she doesn’t have access to her email right now—so the question goes unanswered, and your client is now thinking you’re unresponsive. After several attempts she starts thinking about switching advisor.

This dilemma was at the center of our webinar about the hidden dangers of a no-texting policy.

While many financial services firms still persist with a no-texting policy, advances in technology that allow compliance teams to capture business texts while keeping personal messages private means such restrictions look increasingly outdated.

“Texting is a far more effective form of communication than email,” says Jill Lee, a message community specialist at Global Relay. “While only one in five emails are opened, text messages are opened 98% of the time, and almost half of all text messages are responded to. By contrast, less than one in 10 emails elicit a response.”

Compliance challenges

 “Not only do no-texting policies act as a handbrake on faster communication—potentially irritating clients—they also create other challenges,” adds Matis Jasicek, regional director at Global Relay.

These challenges include:

  • Ensuring that a no-texting policy is effective. The growing trend of BYOD (bring-your-own-device) programs, where employees are able to use their own cellphones instead of a company-issued device, has blurred the line between personal and business use, and has also made it harder for compliance officers to monitor whether the policy is being followed or flouted.
  • Increased risk of creating compliance gaps. Firms can’t prevent clients from texting their advisors, and advisors are then torn between adhering to the policy or jeopardizing client engagement. Do they ignore their client or do they respond? “Given the temptation to fire off a quick text, it is only a matter of time before a compliance violation could occur,” says Jasicek.
  • Inefficiencies caused by no-texting policies. Advisors need to be able to respond to clients in a timely manner without forcing them to communicate using a different channel. Not only can that lead to fragmented conversations and potential loss of information, it is also guaranteed to frustrate clients.
  • Lost revenue. Due to the expectations of a new generation of investors, who grew up using multiple messaging platforms, firms need to be open to new communication channels. Millennials are not going to phone, they don’t want to send an email—and they don’t know or care if a firm has a no-texting policy. “If you can’t swiftly respond to their text, they are just going to swipe right to the next advisor who can,” comments Jasicek.

Regulatory scrutiny

The regulatory ramifications of a no-texting policy can also be severe, adds Donald McElligott, vice president of compliance supervision at Global Relay. In 2016, a Georgia-based firm was fined $1.5 million for failing to retain around one million text messages sent by advisors from company-issued devices, although they had a no-texting policy in place.

Regulators have already warned that they are paying closer attention to text messaging. One red flag they watch for is references to text messages in other electronic communications that are being monitored. If texts aren’t being retained, then regulators know that the firm isn’t strictly enforcing their no-texting policy.

All of this underscores the potentially damaging approach of persisting with a no-texting policy. Regulators themselves know that the technology is now readily available to capture and store text messages, while dedicated apps can solve BYOD issues by creating a separate business number that is linked to an employee’s personal device—allowing them to use their own cellphones in a compliant way without compromising their privacy.

Watch the full 30-minute webinar on demand here or for more information email connect@globalrelay.net.

Submit a Comment

Stay up to date