Like many industries, the wealth management business has many rules and regulations. Many of the rules make good sense and were created after real-world problems occurred.
I have one rule on my mind this week, and it concerns one of the ways that we communicate with you: texting.
Acropolis is regulated by the Securities and Exchange Commission (SEC), and one of its rules concerns maintaining our books and records.
At first, that rule meant keeping copies of the physical letters we sent in the mail. We’d write the letter, have our Compliance Officer, Bob Fleming, review and sign off on it, and put a copy in your physical file.
Well, we don’t write many letters anymore outside of the larger mailings because everyone has moved to email. Years ago, we bought software that automatically captures and archives all the emails from our servers.
Bob randomly reads the emails (the stories he could tell!), and the software looks for words like “guarantee” or “inside information.” Bob told me that one email chain between me and a client kept coming up because I made a joke about guaranteeing something silly.
When texting first came out, I thought it was a nice way to connect with just a handful of people: immediate family members, significant others, and a few close friends. Unfortunately, it’s turned into another source of junk from politicians, and my doctor is reminding me of an upcoming appointment.
The SEC said that we had to track texts, too, and we decided at first that we wouldn’t communicate with clients via text. That can be tricky when your dad is a client. My dad would text me about dinner on Sunday and ask how the market was doing, so the first half of the text was okay, but the second part was a no-no.
Then, it turned out that every major Wall Street firm was completely abusing texts (and other forms of off channel communications) by doing deals on them, selling securities, and all kinds of things that were way out of line. The brokers and traders thought they had a loophole where they weren’t being monitored and took advantage.
The SEC stopped that. After several polite warnings, the SEC got serious and collectively fined the big firms $2 billion. That’s right—$2 billion!
Well, at that point, we got pretty serious about it and got some new software that we could call and text with, which also followed the rules about capturing and archiving.
It meant a new phone number, so we had new business cards printed that removed our personal cell phone numbers and added the new ones so people could text us and we’d stay out of trouble.
It’s still a little imperfect because some clients still have our old phone numbers in their phones and use them to text.
It happened to me last week, and it’s no big deal, but I had to take a screenshot of the text, email it to myself, copy and paste it to a picture file, and manually save it in their correspondence folder. Then, I texted back, saying to use my new number from that new number. Again, it’s not a big deal, but it wasted five minutes.
I believe we are fully compliant at this point, but this email is essentially an appeal to you to help us stay compliant. So, you can text, but please be sure to use the most current phone number.
Personally, I think email and the phone are enough, and I’m afraid that I’ll miss something if I have too many ways to communicate, but right now, there are only three.
I can only imagine that if Elon Musk’s Neurolink works, people will send us telepathic messages, and the SEC will want to install a chip in our brains, but that’s a worry for another day.