How Soon Will Asset Managers Be Texting Advisors?

If financial advisors are planning to communicate with their clients via text in the next five years—as reported in recent InvestmentNews research—will they also be expecting to text with fund companies?

Here’s the survey data that prompts the question. InvestmentNews also reports that 20% of surveyed investors under the age of 45 expect to be communicating with their advisors via text in five years. 

Note that direct, personal communicating via text is practically swapping places with communicating via U.S. postal mail.

In a May post, BlueLeaf made the argument for the convenience of advisor/client texting:  

“You have a very busy day on the road, but need to contact your client about something quick. You don’t want to call and leave a voicemail in the chance that they won’t listen to it in time (or at all). Email’s no good either, as they could potentially miss important information about your upcoming meeting. You need a tool that will help you to make immediate contact to leave your brief message.”

All of the above could apply to wholesaler-to-financial advisor communicating. Texting provides for a direct, time-sensitive communication that other means don't.

And, I dare say (and the reason for the mention of SMS messaging here), Marketing might well tiptoe into permission-based texting.

But in five years? Five years in this industry is like tomorrow in others. Is it on your firms’ roadmap?

I’m aware of firms that offer text messaging capability related to: 

• Shareholder accounts (see T. Rowe Price)
• Retirement accounts (see Vanguard)
• Retirement account enrollment via text (see The Principal)
• The availability of market and economic commentary (see Northern Trust)
• A whole host of commentary and reports and fund event options (see Fidelity) 

This is almost the same list of automated content pushes that I offered in my 2012 blog post on the topic. I haven’t heard a peep yet about firms adding SMS to their call center support, enabling wholesaler-to-advisor texting or organizing for opt-in marketing communications by text.

Not A Regulatory Concern

Evidently, texting does not break new regulatory ground.

“We haven't talked about text messaging in a while,” says Theresa Hamacher, president of NICSA. “It doesn't seem to present any new areas of concern from a regulatory standpoint. My sense is that texts and emails are lumped together and handled similarly. Social media is a much bigger issue, since it's more public and harder to capture.”

How would a regulated enterprise support one-to-one (as opposed to automated) texting? I found this 2011 video about a SalesForce app that will help you visualize how a CRM might enable the communication, in the same way that a CRM supports Sales' emails. This is just for illustration, note. I know nothing about SMS Magic and have no idea whether this developer's storage of the outgoing and incoming text messages would meet FINRA recordkeeping requirements.

For Wholesalers' Best Clients

In fact, wholesalers today are using text but “only for their best clients with whom they have a relationship,” according to Rob Shore, founder of Wholesaler Masterminds.

"The great wholesaler understands the various methods of effectively communicating with their advisors and, today, texting is one of those options. That said, if wholesalers launch into a texting dialogue without knowing that this form of outreach is welcomed by the advisor it will backfire. Spam texts are more invasive than spam emails," Shore says.

True that, Rob.

(I appreciated being able to create the images above on iPhoneTextGenerator.com, but future asset manager texting will almost certainly take place on 4G-plus devices.)  

Cross-Functional And Complex

Mutual fund and exchange-traded fund (ETF) marketers are well aware of 1)the high reliance of advisors and investors on their phones and 2)the immediacy and impact that text messages have. In fact, these SMS messaging stats have been cited so frequently that the date and the source have long since been shed: Reportedly, 98% of text messages are read and responded to within 1.5 minutes versus 2.5 days for email.

Texting offers the potential to improve the relevance, timeliness and even usefulness of what's being communicated. At the same time, preparations for texting will need to be cross-functional and will be complex. My assumption is that these are in the works at least a few firms.

Do you work for the rare firm that has established an SMS capability already? If so, please let us all know below. Others' thoughts are welcome, too.

Comments

[Roger Wohlner]

If a wholesaler ever tried text me you can be sure I'd block that number pronto. There is nothing I need to know with that level of urgency from a wholesaler, I would consider this an extreme waste of my time to receive a text like the one's illustrated in this piece.

[Blane Warrene]

Pat this is an interesting front, not new ground necessarily but as Roger points out - takes some thought as to how it could would, should be used, it seems there are three avenues - B2B as in advisors, the current investor and perhaps the next gen of prospects who find this channel appealing. As you covered, when texting an advisor, not a huge regulatory concern.

What's interesting are the use cases. Perhaps some advisors want to know when time sensitive information is available they can use for clients? As some firms do now, current investors may want alerts about their portfolios in this manner. What I muse on is how a prospect might want notified in this way of they if they opt in to it. Sounds foreign to anyone my age or up. I'm old enough to have had a rotary phone and Commodore 64. But my younger daughter that will be investing in five more years can't imagine using email. She yells at me for emailing her important stuff because she only looks there once a month. Hmmm.

[Pat Allen]

Roger and Blane,

You’ll hear no argument from me regarding the permissions that will need to govern asset managers’ use of texting, whether to advisors, shareholders or the media. Absolutely, those will have to be in place. These communications will have to be opt-in.

But as illustrated by Blane’s daughter, messaging is a communications trend that I think we need to plan for.

Thanks to both of you for commenting.