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6 in 10 people prefer texting over calling.
Financial professionals are no different.
But what started as a quick, easy way to stay in touch with clients has turned into a serious compliance concern for brokers, advisors, and other players in the financial industry.
More specifically, the SEC and FINRA have stated that if you’re using text for business communication in finance, you must archive the conversation. Period
That shift has created a delicate balancing act for many industry players.
On one end, clients expect fast, mobile communication. On the other, regulators expect complete oversight.
Firms must therefore find a financial compliance line that delivers both without risking fines or violations.
In this article, you will learn:
- Why regulators now treat text messages like email or phone records
- The compliance standards that your archiving system must meet to pass regulatory exams
- How to evaluate SMS archiving tools for your firm’s compliance needs
- How iPlum ensures mobile compliance for financial organizations and more.
Let’s dive in.
Table of Contents
1. Why is text message archiving a must for the financial sector?
2. What are the forces behind SMS archiving requirements for financial services?
3. What do financial regulators expect from SMS archiving?
4. Why should you care about text archiving if you’re in the financial sector?
5. What must a compliant text message archiving solution provide?
6. How does iPlum’s financial compliance line help meet SEC and FINRA requirements?
Why is text message archiving a must for the financial sector?
To an ordinary user, texting is great for casual communication.
But in the eyes of regulators, it’s official business communication.
If you’re talking to clients about investments, trades, or accounts over SMS, you must capture and store it like any other record.
Here’s why that requirement is non-negotiable for financial services.
Text messages as regulated business records
Regulators don’t care how informal a message feels.
If you’re discussing business, it’s a record, just like an email or a phone call. The SEC and FINRA both treat text messages as part of your official communications. If you’re not archiving them, you’re breaking the rules. Simple as that.
Increased regulator scrutiny on off-channel communication
Off-channel communication, such as texting on personal phones, is getting special attention.
Why?
Because it’s easy to do and hard to track. And, according to regulators, way too many firms say they have policies in place. However, they don’t have a foolproof solution to monitor what’s happening outside official systems.
Enforcement actions shaping compliance standards
Big-name banks and broker-dealers have already paid hundreds of millions in fines for failing to capture business texts.
These enforcement actions are now the benchmark. If regulators see you haven’t learned from those cases, they assume you’re not serious about compliance. And act accordingly.
Compliance exposure tied to everyday texting
Most violations don’t start with bad intentions. They start with “just a quick text.”
But casual messages can include investment advice, trade details, or client instructions. Without archiving, those become invisible to compliance teams. That’s how small texting habits turn into big regulatory violations and career-ending mistakes.
What are the forces behind SMS archiving requirements for financial services?
Text archiving is a requirement for financial firms. But the question is, what regulations are driving that requirement, and what exactly do they demand?
Below, we’ll break down the specific obligations coming from each regulatory body. And what they mean for your firm’s mobile compliance strategy.
SEC recordkeeping expectations for electronic communications
The SEC requires broker-dealers and investment advisers to preserve business communications in a non-rewritable, non-erasable format under Rule 17a-4 and Rule 204-2, respectively.
Those obligations extend to electronic communications tied to securities activity, including text messages. Retention periods span multiple years based on record classification.
Supervision duties apply alongside retention, too.
Firms must operate systems that give compliance staff ongoing access for review and exam production. As a result, business texting must operate inside controlled, auditable recordkeeping systems rather than informal mobile workflows.
FINRA supervision rules and audit readiness
The FINRA enforces SMS oversight through Rule 3110 on supervision and Rule 4511 on recordkeeping.
Rule 3110 requires firms to supervise business communications tied to investment advice, transactions, and client instructions, regardless of channel.
Meanwhile, Rule 4511 requires those communications to be preserved and made available for examination.
During audits, FINRA may request specific text conversations. Therefore, your SMS archiving solution must enable fast search, export, and consistent compliance review.
What do financial regulators expect from SMS archiving?
You don’t want to be caught unawares when regulators come calling. It is therefore crucial to understand what financial regulators expect from text archiving.
Below, we outline the standards examiners use to assess compliance.
Searchable and retrievable message records
During audits, examiners expect you to locate specific text messages quickly and accurately. Requests may target a single advisor, a client name, or a narrow date range.
Therefore, your records must be searchable by standard fields such as sender, recipient, and timestamp. Regulators also expect messages to appear in readable formats that preserve full conversation history.
Supervisor access and review workflows
Compliance visibility plays a central role in regulatory expectations.
Supervisors must review advisor communications as part of ongoing oversight, not only during exams. Regulators expect firms to demonstrate how compliance teams access records, perform reviews, and document findings.
Simply, your systems must allow independent access, routine monitoring, and escalation when issues appear.
Why should you care about text archiving if you’re in the financial sector?
There is every reason to align with the SEC and FINRA text archiving requirements.
In this section, we break down why any serious player in the financial sector should care about text archiving.
You don’t want to fail audits
When your firm cannot produce business text messages, regulators treat it as a supervision failure.
And, routine reviews can quickly escalate to formal findings. Those findings can lead to enforcement actions, fines, and mandatory remediation.
Regulators also assume missing records point to broader control weaknesses. Once cited, your firm faces closer scrutiny in future exams. You don’t want that.
You don’t want to lose disputes you could have defended
Text messages become evidence when clients dispute advice, instructions, or timing.
If your firm cannot produce those messages, you lose leverage immediately. Worse still, courts and arbitrators don’t accept explanations about deleted texts or personal phones.
The point is, missing records weaken your position and strengthen the other side’s case. And even minor disputes become expensive when you cannot show what was said and when.
You don’t want clients or regulators questioning your integrity
When text records go missing, your firm loses trust.
Regulators and clients don’t see a technical issue. Instead, they see weak oversight. Both parties then start questioning how you handle their conversations. Those doubts spread through reviews, referrals, and renewals.
In return, you’re forced to spend time explaining archiving oversights. And, once integrity comes into question, restoring confidence takes far longer than preventing the issue in the first place.
You don’t want uncertainty around who said what to clients
Client conversations over SMS are crucial. So, when they go missing, you have to rely on memory.
And, without records, you’ll almost certainly struggle to confirm instructions, timing, or intent.
The uncertainty, in return, creates friction during reviews and disputes. It also weakens supervision.
Archived texts, however, remove doubt. They show who communicated, what was said, and when it happened. In addition, conversations remain anchored in facts rather than recollections. More importantly, you no longer need to make decisions based on memory.
You don’t want exams turning into expanded reviews
Regulatory exams expand when records go missing.
Text gaps raise questions examiners were not planning to ask. What began as a routine exam turns into a deeper investigation. But text archives can easily change that outcome. Your firm can respond quickly, and examiners are confident that you’re handling records correctly.
What must a compliant text message archiving solution provide?
When looking for a financial compliance solution, you want one that can get the job done. Below are the bare minimums.
Automatic message capture at send and receive
You want a system that can capture messages automatically at send and receive.
That way, nothing slips through the cracks. Manual archiving fails because it relies on human memory. Besides, Regulators expect full coverage, not selective capture.
If it's not automatic, it's not reliable. And that puts your firm at risk.
Immutable message storage
Your records must be stored in a way that can't be changed or deleted.
Regulators want to know your data hasn't been tampered with. Screenshots, exports, or editable files won't cut it. Look for solutions that offer WORM storage or a similar feature. If messages can be altered, your entire archive loses credibility.
Centralized search and retrieval
When regulators ask for messages, you need to find them fast.
Your system must allow you to search by name, number, date, or keyword. all in one place. There's no time to jump between apps or devices. Furthermore, centralized search shows you're in control and ready for audits. Delay is often treated as non-compliance.
Supervisor review access
Your compliance team must be able to review messages without needing an advisor's phone.
The system, therefore, should offer supervisors access to monitor and flag issues. Simply, if your compliance doesn't allow supervision, it doesn't meet regulatory expectations.
How does iPlum’s financial compliance line help meet SEC and FINRA requirements?
iPlum's compliance line for financial services provides everything you need to meet SEC and FINRA requirements.
Here’s how iPlum checks the regulatory boxes.
Automatic text archiving
iPlum captures every message sent or received on your iPlum business number.
That way, it eliminates off-channel risks and meets SEC and FINRA expectations for real-time, supervised communication capture. More importantly, you can use your phone freely, knowing that everything is securely stored and ready for review.
iPlum offers up to 10 years of secure, searchable message retention.
WORM-compliant data storage
All archived messages are stored in WORM (write once, read many) format. That means records can’t be changed or deleted, aligning directly with SEC Rule 17a-4 and FINRA Rule 4511.
iPlum ensures data integrity from the moment it’s captured, giving your firm a strong foundation for audit readiness and long-term compliance.
Central compliance console for audit readiness
iPlum provides compliance officers with a centralized dashboard to manage users, generate reports, and access archived data.
You can search by name, number, or date and export records in seconds. As a result, you can respond quickly to audit requests and prove oversight. With iPlum, you don’t have to chase down individual devices or emails when regulators come knocking.
Supervisor access and monitoring tools
Compliance teams can monitor communications without touching employee devices.
iPlum allows supervisors to log in, review texts and calls, flag issues, and maintain audit trails. This setup supports FINRA Rule 3110, which requires active supervision.
It also helps firms detect issues early and demonstrate to regulators that their compliance process is working in real time.
Separation of personal and business communication
With iPlum, financial professionals get a second number on their existing device. The line enables them to separate personal and business communication.
In addition, all business texts route through the iPlum app, ensuring full archiving and control. The structure solves BYOD compliance issues and prevents personal channels from becoming regulatory liabilities.
Next steps
If your firm is serious about avoiding fines, passing audits, and staying ahead of regulatory pressure, iPlum’s financial compliance line is the solution for you.
You get full archiving, supervisor oversight, and secure storage.
Besides meeting regulatory requirements, iPlum also offers a comprehensive suite of texting and calling features, including HD calling, voicemail, auto-attendants, call forwarding, international texting, business hours, and more.
With iPlum, you get mobile convenience, business-grade performance, and audit readiness in one affordable phone system.
Ready to protect your firm and simplify compliance?
Sign up for iPlum’s financial compliance line today.
