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Redtail Pioneers Compliant Client Texting

By Thomas Coyle October 5, 2017

Software maker Redtail Technology has unveiled a tool to help financial advisors send their clients text messages that are secure, compliant and permanently archived in Redtail’s CRM system.

That’s an important development in FA-client communications, according to Redtail’s CEO and chief technology officer, Brian McLaughlin. He says Redtail Speak, as it’s called, is the first text-tracking technology to meet SEC and Finra rules about keeping a permanent record of communications with clients.

As Finra put it in Regulatory Notice 17-18 back in April, “every firm that intends to communicate, or permit its associated persons to communicate, with regard to its business through a text-messaging app or chat service must first ensure that it can retain records of those communications.”

In this sense, compliant texting wasn’t even possible before Speak, which Redtail launched this week. The service triggers automatic storage of all text messages, exchanges and text-based attachments in a searchable archive that’s shared daily with the advisor’s communications surveillance provider.

“Consumers who have text capabilities, and who like to text, should be able to do business that way with their advisors,” says McLaughlin. “Imagine having a client request a text and having to say, ‘No, we can’t do that.’”

Aaron Klein agrees. The head of Auburn, Calif.-based Riskalyze, one of two companies that have already integrated Speak into their Redtail CRM platforms, says Speak represents “the future of how advisors and clients are going to communicate.”

After all, Klein jokes, “the next generation of clients barely knows how to spell the word ‘email.’” Denying the option to text to such clients is “like someone a hundred years ago saying, ‘No, you can’t send a telegram.’”

Younger and next-generation clients are the primary target of Redtail’s Speak rollout. And, given the potential size of the impending transfer of money from boomers to millennials, that’s appropriate, says McLaughlin.

But McLaughlin is quick to say Speak, an add-on to Redtail’s core CRM offering, “isn’t just a play for millennials.” Clients over age 55 are increasingly active thumb typers, he says, with more of them citing texting as their preferred communications medium — even more than telephoning and emailing.

Despite the timing, Speak didn’t arise out of Finra’s move five months ago to lay the ground rules for compliant texting — a facet of contemporary communication McLaughlin says the brokerage-industry-funded watchdog had never before addressed.

Eric Clarke

Rather, Speak arose from the 2015 Fuse conference — an annual get-together for wealth management technology companies hosted by back-office outsourcer Orion Advisor Services. At that meeting, the Redtail team floated the bare concept of compliant texting for interactions between clients and their advisors.

Encouraged by winning an award for the idea at that year’s Fuse, McLaughlin says he and his colleagues returned from the conference site in Park City, Utah, to their headquarters in Gold River, Calif., determined to make it a real-world application.

Using the Speak app, advisors text a client’s phone number — in response to a query or to initiate a dialogue — and the discussion is automatically stored in Redtail’s CRM. In addition to messaging and storage, Speak’s capabilities include “notifications, messages, invitations, out of office replies,” Redtail says in a press release.

“Beyond texting, if the client and the advisor agree to a meeting, Speak adds the event to calendar” and notifies both parties, McLaughlin explains.

Omaha, Neb.-based RIA Orion is the other wealth management vendor to have installed Speak prior to its launch this week. Its CEO, Eric Clarke, considers Speak’s interactivity with Redtail’s larger CRM framework one of its main selling points.

That and the fact Orion enjoys “great tech integration” with Redtail across about “400 advisory firms” made “secure and compliant text messaging” seem a compelling value add, says Clarke.