Effortless Email Archiving for Financial Advisors & Regulated Firms

SEC Hands Out Billions of Dollars In Fines

The U.S. Securities and Exchange Commission (SEC) has intensified its enforcement of recordkeeping regulations for financial firms, particularly focusing on unauthorized communication channels. This crackdown has led to substantial fines for numerous firms of all sizes across the country.

• August 2024: The SEC charged 26 financial firms, including Ameriprise Financial, Edward Jones, LPL Financial, and Raymond James, for using unapproved communication methods like personal text messages and WhatsApp for business purposes. Each of these firms agreed to pay penalties ranging from $10 million to $50 million, totaling approximately $390 million.
  New York Post >

• September 2024: Twelve firms, such as Stifel, Nicolaus & Co. and Invesco Advisers, were fined a combined $88.3 million for failing to maintain and preserve electronic communications as required by federal securities laws. Individual penalties ranged from $12 million to $35 million.
  The Wall Street Journal >

• November 2024: The SEC reported a record $8.2 billion in financial penalties for fiscal year 2024, with a significant portion stemming from enforcement actions related to record keeping violations.
  The Wall Street Journal >

How To Keep Your Financial Firm Compliant

Given the recent crackdown on compliance with record keeping rules, it’s a great time to ensure your financial firm has the policies, processes, and tools to keep your entire team compliant. 

The world is changing. Don’t shy away from it.

Financial clients today expect you to make their lives smoother, faster, and more efficient. Failing to embrace modern communication channels – such as texting, chat, and social media direct messages – will mean a slow decline in your firm’s ability to keep customers and attract younger generations.

Text messages are well on their way to replacing email as the primary and preferred form of communication between many financial advisors and their clients. Texts are simply faster, less formal, and easier for both parties to manage, especially on the go.

So take the time to determine how these new channels of communication are best integrated into your firm’s day to day practices. Resisting them is likely to make your firm obsolete over time.

Know the rules, and what they mean.

Financial services compliance when it comes to electronic communications primarily revolves around several key rules and regulations, set forth by the SEC and FINRA.

• SEC Rule 17a-3 – This rule mandates creating and maintaining detailed records for business activities, including customer information, orders, transactions, financial statements and more. 

• SEC Rule 17a-4 – This rule requires all detailed records to be archived and kept on file for specific durations, usually six years. Electronic archives must be non-rewriteable and non-erasable (WORM).

• Rule 204-2 – Part of the Investment Advisors Act of 1940, this rule outlines various rules for records keeping, including types of records, retention periods, and accessibility requirements.

• FINRA Rule 4511 – This rule also requires firms to create and maintain accurate books and records of their business activities, and to preserve them for regulatory inspections for set periods of time.

• FINRA Rule 3110 – This rule mandates systems to review incoming and outgoing written and electronic correspondence, including emails and other communications.

Each of the rules above is designed to ensure regulatory compliance, detect potential misconduct, and safeguard financial clients and investors. With the rapid acceleration of electronic communication, it’s never been more important to implement an archiving compliance solution for your firm.

Let Archiving Software Do The Work For You

Without reliable archiving, your firm risks non-compliance, which can lead to hefty fines and a damaged reputation. Given the exponential growth of electronic communications, it’s no surprise that most financial services firms are turning to technology and software for assistance.

What makes a technology solution the best for your firm? Here’s what to look for when evaluating record keeping compliance software.

• Regulatory Compliance  – Your solution must meet all industry standards for record keeping, including storage technology, retention periods, security, and more. 

• Multi-Channel Capabilities – Having to use different software for different communication channels creates a lot of hassle. Look for all-in-one solutions with all-in-one integrations. 

• Easy To Use – Regardless of your technical expertise, the right solution makes it painless and simple to connect your accounts, access your archives, and process reports.

• Data Ownership – You should have complete control of your data, with fullability to export and migrate as you please – with no hidden fees or extra charges.

• Customer Support – Even the easiest to use software comes with a learning curve. Ensure you’ll receive technical assistance during setup, and ongoing access to technical support.

Whether you are a solo advisor, small firm, or large scale enterprise, we’re confident Archive Intel will make your records keeping and compliance easier that ever before, without the complexity or cost of traditional systems. With our Artificial Intelligence (Ai) capabilities turned on, you’ll streamline your workflows and cut down your manual review hours substantially.