Firm’s Guide to Balancing the Risks and Rewards of Digital Messaging

Whether your clients prefer to text or slide into your LinkedIn DMs — they expect access to advisors and agents on different digital channels and anticipate receiving fast, personalized responses.

As you consider allowing a new digital messaging channel, you have to ask yourself:

• How do we safely and effectively incorporate this channel into our workflows?

• Are there ways to mitigate compliance issues? And, most importantly…

• Do the rewards of digital messaging outweigh the risks?

Let's break down how you can navigate this compliance minefield without falling behind your competition.

The SEC has made one thing very clear: having digital messaging policies isn't enough. Firms must prove they have the right supervision, enforcement, and recordkeeping mechanisms in place… or else.

What's the 'else?'

• Regulatory fines and penalties: In recent years, the SEC has issued hundreds of millions in fines to financial institutions for improper recordkeeping of client interactions and unmonitored digital communications. And though fraud and abuse are primary areas of focus this year, recordkeeping failures can be tacked on to fraud-related enforcement actions increasing the overall penalties.

• Lack of control: Firms lose control over who's saying what to clients and prospects without an enterprise-grade compliance strategy. Unapproved channels (e.g., personal messaging apps) create blind spots in compliance oversight.

• Scalability issues: Manually monitoring and approving every message across every channel is impossible at scale. Advisors, agents, and brokers need a frictionless workflow — not compliance roadblocks that slow productivity.

• Potential for reputational damage: Inconsistent messaging across different advisors or branches can erode trust with clients. Unmonitored communications could lead to misleading claims or non-compliant promises, putting the entire firm at risk.

Teams are under intense pressure to facilitate proper supervision, prevent brand misrepresentation, and manage compliance. Those without a well-defined digital messaging strategy are taking a significant regulatory and reputational risk.

The financial services industry is relationship-driven — and today's clients want real-time, personalized communication. Firms that can balance compliance and innovation:

• Increase client engagement and retention: SMS messages have a 98% open rate (compared to a 20% average for email), and 90% of SMS messages are read within three minutes of delivery. Even more importantly, 91% of consumers say they'd opt-in to SMS communications from brands if it improved their experience. Not surprisingly, advisors who leverage digital messaging effectively see higher conversion rates and stronger client relationships.

• Benefit from productivity and efficiency gains: Shifting communication to SMS and social messaging can reduce follow-up emails by up to 50%, and using high-response-rate channels can save 3–6.5 hours per week per advisor.

• Minimize complexity with a consolidated tech stack: Using a tool that allows for CRM integration with SMS messaging streamlines workflows and alleviates the pain associated with bouncing between apps and software tools to get work done.

• Empower the field: Clients expect real-time engagement — and giving your field the ability to meet clients where they are builds trust and differentiates your firm. Firms that offer secure, compliant messaging stand out as modern, tech-forward advisors.

To sum it up, firms prioritizing compliant digital messaging have a competitive edge — while those that don't stand to lose business to more agile competitors.

Financial firms need to act now to get ahead of compliance challenges. Here's a practical framework to help you move forward.

Step 1: Assess your digital messaging channels

• Identify where your advisors and agents are already engaging clients (SMS, LinkedIn, etc.).

• Make sure that each channel is trackable, secure, and compliant.

Step 2: Choose enterprise-grade compliance tools

• Implement AI-powered compliance monitoring to flag potential risks in real-time.

• Use automated archiving solutions to help meet regulatory requirements.

• Deploy role-based permissions to control access and approvals.

Step 3: Train and empower your teams

• Educate advisors on approved channels and compliance best practices.

• Establish clear workflows that balance compliance with productivity.

• Provide ready-to-use message templates that align with regulatory guideline.

Step 4: Measure and optimize your strategy

• Track engagement, compliance incidents, and agent and advisor adoption.

• Adjust policies based on real-time data and regulatory updates.

Make sure that digital messaging aligns with overall client experience goals. Follow these simple steps to keep your agents, advisors, and clients happy, productive, and compliant.

Regulatory fines and compliance risks aren't going away — and neither is the demand for digital-first communication.

Firms that proactively build a compliant, scalable messaging strategy will:

• Increase client satisfaction and engagement

• Improve advisor productivity and efficiency

• Strengthen compliance oversight to prevent costly fines

• Gain a competitive edge over less agile firms

Ready to lean in? Read about the state of compliance in 2025 and learn how to prepare your firm to thrive.