How to Achieve Mobile Communication Compliance for Financial Professionals

A personal smartphone can become a compliance problem when advisors use it for client calls and texts. In fact, the SEC has brought enforcement actions against more than 100 firms over electronic recordkeeping failures, with penalties exceeding $2 billion.

So, how can financial professionals achieve mobile communication compliance amid the growing use of smartphones, text messaging, and off-channel communications?

In this article, we examine the requirements financial firms need to consider, the risks of mobile communications, and the steps advisors can take to build a compliant communication process.

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1. Why is mobile communication compliance important for financial professionals?

2. How to build a compliant mobile communication process

3. How iPlum addresses mobile communication compliance

4. Frequently asked questions

5. Start using iPlum for compliant mobile communication

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Why is mobile communication compliance important for financial professionals?

Financial professionals communicate with clients throughout the day. Much of that communication now happens on smartphones.

An advisor may answer a client call from a personal phone. A broker may send a quick text about a meeting. An insurance professional may discuss a policy through SMS. A mortgage professional may exchange documents or sensitive information through mobile messaging.

The problem starts when those communications involve regulated business, and the firm cannot properly record, retain, retrieve, or supervise them.

The SEC has made off-channel communication a major enforcement priority.

In 2023 alone, 11 Wall Street firms agreed to pay a combined $289 million over electronic recordkeeping failures.

For financial firms, mobile communication compliance therefore requires more than telling employees not to use personal messaging apps.

The firm needs a communication system that makes compliant behavior easy to follow.

So, what counts as a mobile business communication?

A business communication can take several forms, including:

Incoming and outgoing phone calls
SMS text messages
MMS messages
Client follow-ups
Appointment confirmations
Investment-related discussions
Insurance conversations
Mortgage communications
Messages about recommendations or financial advice
Communications about transactions or client accounts

The exact recordkeeping obligations depend on the firm's registration, activities, applicable rules, and supervisory requirements.

However, one principle matters: if a communication qualifies as a business record, the firm needs a reliable method to preserve it according to the applicable requirements.

But why do personal phones create a compliance problem

Personal smartphones make business communication convenient. Yet native phone and messaging apps were not designed around financial recordkeeping requirements.

An advisor using a personal phone may have:

Business texts mixed with personal conversations
Business calls recorded only in a device call history
Messages that can be deleted
No firm-level archive
No reliable retention policy
No easy way for compliance personnel to retrieve records
No automated recording disclosure
Business communications spread across different applications

The SEC's enforcement actions demonstrate the consequences. Any serious financial firm, therefore, needs a defined mobile communication policy and the technology to enforce it.

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How to build a compliant mobile communication process

Technology is only part of mobile communication compliance.

Financial firms also need rules that specify which channels advisors may use for client communication, how those communications must be recorded and retained, and what to do if a client conversation occurs through an unapproved channel.

Here’s how to do that:

Establish an approved communication channel

Start by deciding where advisors can communicate with clients.

For example, a firm might establish the following policy:

Client calls must use the firm's approved business number.
Client texts must use the approved business messaging service.
Personal SMS cannot be used for client business.
Personal messaging applications cannot be used for regulated business.
Employees must report accidental off-channel communication.
Compliance personnel must have access to the required records.

The policy should match the firm's regulatory obligations and supervisory procedures.

Give advisors a compliant mobile number

Advisors should have an easy way to communicate from their smartphones.

A dedicated business number can make that process straightforward. iPlum provides a business number through its mobile app, allowing an advisor to use an existing smartphone for business calls and texts.

Firms can issue numbers to individual advisors and manage business accounts centrally.

Existing numbers can also be ported to iPlum, making adoption easier for advisors who already have established client relationships tied to a particular number.

Configure recording and retention policies

Next, configure the account according to the firm's requirements.

A financial firm should decide:

Which users require recording
Which calls must be recorded
Which messages must be archived
How long records must remain available
Who can access archived records
How compliance personnel retrieve records
Which recording announcement clients should hear
How the firm addresses accidental off-channel communications

iPlum's Enterprise plan provides automatic call recording, recording announcements, and 10-year archiving of calls and text messages.

Train financial professionals

Employees need simple rules.

Training should explain:

Which number to use for client communication.
Which messaging channel the firm approves.
When call recording applies.
What the recording announcement means.
How to retrieve business records when required.
What to do after accidentally using a personal communication channel.
Which communication apps the firm prohibits for business use.

Training also needs periodic refreshers. Regulatory expectations can change, and employee behavior can drift over time.

Review communication records

Compliance personnel should periodically review communication activity.

A review process can examine:

Recorded calls
Archived texts
User activity
Retention settings
Recording disclosures
Employee adherence to communication policies
Exceptions and incidents

iPlum provides usage reporting and access to archived communication records through its portal. Its documentation states that firms can retrieve text logs and content from the online portal.

The exact supervisory process should come from the firm's compliance program.

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How iPlum addresses mobile communication compliance

For many financial professionals, the challenge is not finding a phone system.

The challenge is finding one that works naturally on a smartphone and produces records that meet compliance requirements.

iPlum approaches the problem with a financial compliance solution that offers:

Business calling and texting

iPlum gives each financial professional a separate business number for client calls and texts. Advisors can use that number from their existing smartphone, so client communications run through a business line rather than a personal number.

With the Enterprise plan, you get automatic call recording, recording consent announcements, and archiving for calls and text messages.

As a result, firms can give advisors a dedicated mobile communication channel and retain the resulting business records for compliance purposes.

Automatic call recording

iPlum records inbound and outbound calls made through the business line. The system can also play a recording announcement at the beginning of calls.

For firms that need recorded communications, automatic recording removes the need for an advisor to remember to activate a recording function before each call.

Archived client texts

Texting remains an important part of financial communication.

iPlum archives business texts sent through the iPlum number. Enterprise accounts provide up to 10 years of recording and text retention.

The archive gives the firm a record of business messaging rather than leaving client conversations scattered across individual smartphones.

WORM-compliant storage

iPlum's financial compliance offering states that archived records use WORM storage. The company positions this capability around SEC Rule 17a-4 and FINRA Rule 4511 recordkeeping requirements.

For a regulated firm, record integrity matters as much as record collection.

A business number on the advisor's existing phone

Advisors do not necessarily need a second physical device.

iPlum provides a separate business line through its app. That lets an advisor use the same smartphone for personal and business activity, with client communications routed through the business line.

The firm can also port an existing business or mobile number into iPlum.

A cost-effective route for smaller firms

Large financial institutions may have an extensive communication infrastructure. Smaller advisory firms, brokers, insurance agencies, and mortgage businesses may need a simpler solution.

iPlum's Enterprise plan costs $25.99 per user per month when billed annually. It provides calling, texting, call recording, announcement recording, and 10-year call and text archiving.

A smaller firm can therefore equip individual financial professionals with a compliant mobile communication channel rather than building a complex communications environment from scratch.

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Frequently asked questions

What is mobile communication compliance for financial professionals?

Mobile communication compliance means using approved systems and procedures to record, retain, protect, and retrieve business communications made through mobile devices, as required by applicable regulations.

The exact requirements depend on the firm's regulatory status and activities.

Can financial advisors use their personal phones for client communication?

Yes, a personal smartphone can be used for business communication when the firm has an approved system that separates business communications from personal activity and properly records and retains required business records.

iPlum provides a separate business number through its mobile app, allowing an advisor to use an existing smartphone for business calls and texts.

Does iPlum automatically record financial professionals' calls?

Yes. iPlum states that its Enterprise plan automatically records incoming and outgoing calls made through the iPlum business line. A recording announcement can also play at the beginning of calls.

Firms should configure recording announcements according to applicable federal and state law.

How long does iPlum retain financial communication records?

iPlum Enterprise provides up to 10 years of recording and text archiving.

Firms should select a retention period based on their own regulatory requirements and compliance policies.

How much does iPlum cost for financial communication compliance?

iPlum Enterprise currently costs $25.99 per user per month when billed annually. The plan provides the Professional plan's calling and texting capabilities, plus call recording, recording consent announcements, and 10-year archiving for calls and texts.

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Start using iPlum for compliant mobile communication

Mobile communication need not become a compliance burden for financial professionals.

iPlum gives advisors a way to move client calls and texts away from personal communication channels and into a business communication environment designed for regulated firms.

If your firm is still managing client conversations through personal phones, this is a good time to change that.

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