Redtail Technology is looking to help advisors solve a growing regulatory concern with a new tool for advisors to compliantly communicate with clients via text message.
At Riskalzye’s first annual “Fearless Investing” summit in Lake Tahoe, Nev., Redtail will launch Speak, a new app embedded within its client relationship management software that lets advisors send text messages to, and receive from, any mobile number. The message appears to clients’ phones just as any other text message would, allowing for mobile texting that doesn’t require them to set up any additional software or apps.
Client messages will display in the Speak app, which advisors can customize with notifications to ensure nothing gets missed. Since Speak lives within the CRM, advisors can open communication threads to authorized team members for real-time collaboration between colleagues without ever leaving Redtail. The app will cost an additional $79 per month, per firm.
Every conversation, message and document sent is automatically recorded, archived and searchable. Speak can also share the information with third-party archival providers like Smarsh.
Redtail CEO Brian McLaughlin said the idea for Speak originated in a hackathon at Orion Advisor’s 2015 Fuse conference. As the company worked to develop it into a viable product, McLaughlin says he kept hearing demand from both independent broker/dealers and registered investment advisors for a way to text with clients.
“Today, people have come to expect real-time communication,” McLaughlin said, but many advisors just aren’t equipped to do so compliantly. According to a survey by Smarsh, only half of the financial services firms that allow text messaging have an archiving or supervision solution in place. McLaughlin said he’s seen other research that shows that number is as low as 10 percent.
“If advisors are already texting their clients, chances are they’re doing it out of compliance, and if they aren’t, they’re missing out on a huge opportunity,” McLaughlin said.
1st Global Capital, a firm that supports CPA wealth management firms, announced that it would act as a launch partner for the Speak product, with President David Knoch saying that his firm’s advisors “have been passionately seeking a compliance-approved method of texting with their clients.”
As demand for text messaging increases, regulators are stepping up efforts to inspect digital communications. A FINRA regulatory notice in April called for all text messaging (and social media) conversations to be recorded. In 2016, FINRA reported 99 books and records cases resulting in $22.5 million in fines—a 43 percent increase from 2015.
McLaughlin says Speak’s functionality goes beyond compliance. For starters, text messaging is just a quicker, more efficient form of communication than emails, which he says only get opened about 6 percent of the time and usually take hours or days for a response, if at all.
“A big advantage to text is they get opened about 99 percent of the time. If someone hits your cell phone with a text, you’re generally going to look at it,” McLaughlin said. “Think about the scenarios—client comes in and does a financial plan, but [the advisor] needs one more thing. One more question answered that could be a simple yes or no.”
Speak can also utilize other functions of the Redtail CRM. Content from conversations will automatically get linked to client records, and advisors can schedule meetings within text message threads that are added to the CRM calendar.
Integrations with Orion and Riskalyze also show intriguing potential. For example, if a client texts to ask if a deposit went through, the advisor can type “#Orion” into Speak to retrieve a report and text the pertinent data back to the client. Meanwhile, the advisor’s team can check the client’s Risk Number by typing “#Riskalyze” before deciding how to invest the deposit.
“Speak eliminates all the difficulties of gathering information or having quick conversations” McLaughlin said.
