4 Things to Know About Tex­ting

Ad­vi­sors needn’t avoid it al­to­gether, but there are some best prac­tices to keep in mind — and some pit­falls to avoid.

Financial Planning - - CLIENT - BY PAUL HECHINGER Paul Hechinger is a Fi­nan­cial Plan­ning con­tribut­ing writer in New York. Fol­low him on Twit­ter at @Paul­hechinger.

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, based in West Des Moines, Iowa, which 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 clar­i­fied that it re­gards tex­ting as 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 (“Did you 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. 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 many older clients are just as in­ter­ested in sav­ing time.

Don’t as­sume that your younger clients al­ways pre­fer tex­ting, says David Geibel, se­nior vice pres­i­dent at Univest Wealth Man­age­ment in Soud­er­ton, 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. Be­sides ex­plain­ing to clients that replies may be slower dur­ing non­busi­ness hours, ad­vi­sors should make sure staff mem­bers get copies of texts to make re­sponse times faster.

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