FINRA’s Exam Priorities, 2020

Once again, FINRA has made it very clear that organizations must have a solution in place for capturing and archiving text messages. It is no longer acceptable to simply state that your firm does not allow text messaging. 

They know advisors and clients are texting, and they expect organizations to acknowledge such by having a solution.

Here is the exact language:

Communications via Digital Channels – Firms’, registered representatives’ and customers’ use of an increasingly broad array of digital communication channels (e.g., texting, messaging, social media or collaboration applications) may pose challenges to firms’ ability to comply with obligations related to the review and retention of such communications.

FINRA may consider the following, among other factors, when reviewing firms’ use and supervision of digital channels:

  • Does your firm have a process in place to evaluate new tools available to your registered representatives to determine whether there are digital communications channels that should be captured, included in your firm’s routine electronic communications supervisory reviews and stored in accordance with books and records requirements?
  • Is your firm periodically testing its systems to ensure these communications are being captured for review and retention?
  • Do your firm’s supervisors know the “red flags” they should keep in mind during their routine supervisory reviews and which indicate a registered representative may be communicating through unapproved communication channels? Are your firm’s supervisors following up on such red flags, which include, but are not limited to:
    • email chains that include non-approved email addresses for registered representatives;
    • references in emails to communications with a registered representative that occurred outside approved firm channels; or
    • customer complaints mentioning such communications?10
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