The Preferential Effects of Millennials on Financial Services Communications

In this article, originally published by MoneyInc, Smarsh Chief Evangelist Mike Pagani explains the important effects that the Millennial generation is having on business communications practices for financial firms and impacts on compliance. Download the full article here.

Members of the Millennial Generation, born between 1980 and 2000, have become an increasingly important customer demographic for registered investment advisors (RIA) and Broker-Dealers alike. As Millennials mature in the workforce and earn higher wages, they are more likely to expand their investment portfolios seeking services and developing relationships with financial services firms.

This trend is particularly impactful for heavily regulated Financial Services firms, in which compliance and proper supervision of business-related communications is mandated by FINRA and the SEC.

Financial Services firms are being forced to evolve their mix of communication channels as they build their business with this new group of potential investors. On average, 34% of Millennials say they prefer brands that communicate through social media, versus only 16% for older demographics. Over 60% of Millennials favor two-way texting as a means of engagement with companies because it’s more convenient, faster and easier, according to statistics published by OpenMarket.com.

Allowing employees to communicate with clients using SMS/text is important not only to be competitive in business, but also enables a productive and compliant workforce. The younger work force not only quickly embrace, but also prefer these fast-paced exchanges as much as they value quick, internal collaboration using popular instant messaging platforms like Slack or Workplace by Facebook.  However, firms that adopt the use of these newer channels also need to capture, retain, actively supervise and quickly produce ALL electronic communications content when required by the regulators, much as they already do for email communications.

The Millennial impact on Financial Services firms also involves a growing number of Millennial employees at FinServ firms who choose to text for communications over traditional voice calls and email. These digital communications for official business must also be retained in a searchable archive for compliance purposes.

The proverbial writing is on the wall – Financial Services firms need to expand their compliance perimeters and related systems to encompass the use of text messaging and social media channels for business communications, or they must face the consequences with regulators. Read Mike Pagani’s Article in MoneyInc.com:
How Millennials are Impacting Business Communications Practices in the Financial Services Industry

Additional resources for financial firms:

Enable RIAs and BDs to communicate via SMS/text and instant messaging
Implement a clear policy to outline rules for allowed mobile devices, appropriate content types and procedures for archiving and supervision.

This Electronic Communications Checklist for Broker-Dealers is useful for implementing your compliance procedures and making certain to meet FINRA regulatory obligations.

Learn more about text message archiving for compliance.