The new regulatory focus in financial services: Texting

Prudential. Cetera. Allstate. Thrivent. Modern Woodmen of America. They’ve all recently empowered their massive field force of advisors and agents to text clients and prospects.

As the trend continues to accelerate, regulators are watching with increasing scrutiny.

FINRA released Regulatory Notice 17-18 last year, which reaffirmed the requirement that financial services companies archive business-related texts in the same way that they would email or written communication, as required by SEC Rules 17-a3 and 17a-4, and FINRA Rules 4511 and 2010.

This essentially means that regardless of your company policy, an audit of your advisors’ texting activities could be requested.

It’s not just FINRA and the SEC. According to an August 2017 study by the Institute of Legal Reform, litigation of the Telephone Consumer Protection Act (TCPA), a law that regulates commercial text messaging, has increased by 46 percent since July 2015; of that number, nearly 36 percent of all TCPA litigation target the financial services industry.


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