FINRA Text Messaging Supervision: What Small FinServ Businesses Need to Know

Imagine this: a financial advisor at a boutique firm gets a quick text from a client — “Go ahead and sell those shares.” The advisor replies right away. It feels efficient and personal. But without proper supervision and archiving, that one text could cost the firm thousands in fines.

This is exactly why the Financial Industry Regulatory Authority (FINRA) requires firms of every size to monitor, supervise, and retain all business-related text messages. For small firms, the rules may feel overwhelming, but the good news is that compliance can be managed with the right approach.

What FINRA Requires

At its core, FINRA’s rule is simple: if advisors use text messaging for business, those texts must be supervised and preserved just like emails. That means:

• Every business-related SMS or messaging app conversation must be archived.
  
  
• Supervisors must be able to review these messages.
  
  
• Firms must show regulators they have policies to prevent off-channel communication.
  
  

In short, you can’t just tell advisors “don’t text.” If texting happens, it must be compliant.

Why This Matters for Small Firms

Large firms can hire compliance teams and purchase enterprise software. Small financial businesses don’t have that luxury. Yet regulators make no distinction — rules apply equally to a 10-person advisory office and a global bank.

The challenge for small firms is balancing client expectations (clients prefer texting) with regulatory obligations (FINRA requires supervision). That tension is where many firms stumble.

A Practical Path Forward

For small firms, the most realistic strategy is to:

1. Use approved platforms that automatically capture and store texts.
   
   
2. Train advisors on clear do’s and don’ts of texting clients.
   
   
3. Document everything, from policies to retention schedules, so regulators see a proactive compliance culture.
   
   
4. Leverage mobile-first solutions that don’t require expensive IT resources to manage.
   
   

The goal is to make compliance automatic so that advisors can focus on clients rather than worrying about what they can and can’t text.

A Real-World Example

Think of a small wealth management practice with just six advisors. Before adopting a compliant texting solution, they told staff to avoid texting clients altogether. In reality, clients still texted, and advisors responded. The firm was at risk without even realizing it. Once they moved to a secure platform with archiving built in, compliance became invisible — and client service improved because texting was no longer a taboo.

The Bottom Line

FINRA requires supervision and retention of all business-related text messages. For small firms, compliance can seem daunting, but it doesn’t have to be. By adopting secure platforms, training staff, and documenting policies, even the smallest financial businesses can meet the rules without losing the personal client touch that sets them apart.

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