4 things advisors should know about texting

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Many advisors are reluctant to use texting to communicate with clients, but texting has become so ubiquitous that it simply isn’t possible for advisors to ignore, and they shouldn’t even try.

“Clients want it,” says Sayer Martin, chief operating officer and co-chief technology officer at Orchestrate, a firm based in West Des Moines, Iowa, that develops software for advisors. “And advisors are responding to what clients want.”

Advisors shouldn’t fear texting with clients. Instead they should embrace it, as it can be a valuable communications tool if used properly.

But be aware of the pitfalls, as well as the right way to use texts. Here are four tips:

1. Be compliant. Martin thinks that advisors may be less hesitant about compliance issues after the Financial Industry Regulatory Authority Inc. this year clarified its position that texting is an acceptable form of advisor/client communication, as long as business-related communications are secure and recorded.

Of course, just as with email or phone messages, advisors aren’t going to make trades, move money or take significant actions based on texts alone.

2. Figure out how clients want to use texts. Clients are most likely to use texts with their advisors the way they use texts with anyone else: for logistics (“Running late – be there in 10”), reminders (“See you Tuesday”) or checking in (“See the email I sent?”).

“It could take the place of an email or notifying clients that their account statement is ready,” Martin says.

“It’s helpful for little things, like when a client doesn’t want or need to get on the phone and have a longer conversation,” he says. “If you’re only seeking one or two data points, texting can be ideal.”

And while there is a tendency to think that only younger clients use texts, Martin says that isn’t a useful generalization, as many older clients are just as interested in saving time.

And don’t assume that younger clients always prefer texting, says David Geibel, senior vice president and managing director at Univest Wealth Management in King of Prussia, Pennsylvania.

“My younger clients still want the phone call and the personal touch,” he says. “After all, that’s the reason they came to a full-service advisor in the first place.”

3. Know the limitations of texting. It is important to understand that texts can’t take the place of substantive conversations or face-to-face meetings, Geibel says.

“If you start relying on bursts of communication, as opposed to phone calls or client meetings, and you’re trying to replace that with email, or God forbid, texting, it’s a recipe for disaster,” he says.

4. Manage expectations. The good news is that most clients instinctively understand when texting works best.

But, like most of us, they may be used to getting replies within minutes, as texting can be the digital equivalent of someone knocking on the door at any time of day or night.

In addition to explaining to clients that replies may be slower during non-business hours, advisors should also make sure that teams, including staff members, get copies of texts to make response times faster.

This story is part of a 30-30 series on how technology is changing your practice.

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