December 11, 2023

Many agents said they were happy to use emoji such as the thumbs up, flame symbol or smiley face as shorthand for expressing enthusiasm or lightening the tone of a message.

But for industry regulators, these now-ubiquitous symbols deserve serious discussion.

How exactly should industry regulators and companies accept ambiguous emoji, which sometimes appear in matters as important as potential customer complaints?

That was the question a top FINRA enforcement official asked last month at the broker-dealer self-regulatory agency’s annual meeting in Washington, D.C., in a May 17 segment where Michael Solomon discussed firm Speaking at a panel discussion on risk monitoring policy, FINRA’s senior vice president for exams acknowledged the difficulty regulators have had in recent years dealing with new forms of communication.

Of particular concern, he said, were so-called “off-channel” messages, sent in encrypted form via text on mobile phones or via services such as WhatsApp. Many times, by design, these can be difficult to capture and monitor.

and then, There are emoji.

Solomon asks, what happens if a customer sends an agent the word “that suggestion” and then follows up with a “very angry, upset emoji”?

“What does that mean from a reporting standpoint, or what do you have to do about it?” Solomon said. “These are complex issues, but they are there.”

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A spokesperson for the agency said FINRA does not have an enforcement policy on emoji, nor does it plan to adopt one. The spokesman said Solomon was “simply encouraging companies to think differently and more broadly about how they regulate text messaging.”

Even so, Brian Rubin, a partner and securities lawyer at international law firm Eversheds Sutherland, enjoyed Solomon’s comments. In a paper titled “Emoji Law Enforcement: You Surely Don’t Seriously,” Rubin has looked at a variety of ways of trying to communicate with emoji and policing them that can go wrong.

Take the “crying face” emoji, for example. According to Rubin, the commonly used image of a yellow face with a round face and tears welling up in its eyes could be used to “express sadness.” But the same notation was used, Rubin wrote, “Sharing the positivity” and saying “Great performance – thanks a lot!”

A similar ambiguity arises with the inevitable thumbs up sign. Older people tend to take it to mean “well done”.

But for young people, “now it’s more of an insult than a positive sign,” Rubin wrote, citing a Emoji online dictionary. The symbol is now often used for “something you screwed up, or even an ‘okay, whatever’ response to something you said.”

Rubin admitted on the phone that he was somewhat intrigued by his thesis. Still, he said, there was a serious aspect to the question he raised.

“Firms should conduct a risk-based review when handling electronic communications from advisors,” Rubin said. “How could they start doing this now without figuring out, at least in theory, what the thumbs-up means?”

As the consultants themselves attest, there are various policies and practices when it comes to emoji. Johnson Rhett, a financial advisor at Branning Wealth Management in Jackson, Mississippi, said he and his colleagues draw a fine line between general-purpose communications and advice involving investments or other financial matters.

For example, when writing the company’s quarterly newsletter, he would insert an arrow to direct the reader’s eye in a particular direction, or a smiley face to soften the tone. Rhett said he also sees emojis popping up in customer emails and other communications from time to time. Whether or not he uses them in his replies, he always tries to respond with a professional tone, he said.

When money matters are involved, emoji are more or less banned, he said. Rhett said he and his colleagues took special care to avoid the “rocket ship, money bag and upward chart” emoji that are often used in online forums to denote that a particular investment prospect is “taking off” or “coming soon” to the moon. “

“Something like that, people can misinterpret it and do what they want,” Reid said. “And that’s what we’re trying to avoid. We’re trying not to be misunderstood and saying anything that might be seen as a promise.”

Rhett said his firm relies on a third party, Asset Dedication, based out of San Francisco, to help with its compliance responsibilities. The last thing he wants, he says, is for some regulatory expert to have to try to decipher the meaning of investment advice peppered with dozens of emojis.

Others are less inclined to use emoji in any context. Gordon Achtermann, a certified financial planner and founder of Your Best Path Financial Planning in Fairfax, Va., says he avoids these symbols almost entirely in his professional communications.

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“No winking smiley faces, no laughing tongue outs, absolutely no eggplants or peaches,” he said in an email. “I might use a basic smiley on rare occasions; it’s hard to misunderstand that.”

Natalie Slagle, a financial advisor and founding partner at Fyooz Financial Planning in Portland, Oregon, said her firm uses emojis heavily in emails to clients. But again, they kept the informal communication entirely, and did not ask for financial statements or financial plan summaries.

“Most of our work is celebrating the great victories in our clients’ lives, both financial and personal,” Slagle says. “That’s where we show more of the human side than the commercial side.”

Slagle says her company holds all client meetings virtually, and emojis offer a great way to convey emotion from a distance.

“We can’t hug them, we can’t give them high fives,” she said. “So it’s a way for us to connect with our customers on a deep level.”

Dale Shafer, a certified financial planner and founder of Life Moves Wealth Management in Scottsdale, Arizona, says he tries to follow the lead of his clients. When they were official, he responded in kind. If they’re used to emojis, he might include an emoji or two in his reply.

“These are little trinkets that can help you build a relationship,” he said.

Shafer agrees that emojis should not appear in any advice about client money and investments. He said he hated having to answer questions to regulators about what a smiley face or a thumbs up sent in a text message meant in a particular situation.

Shafer agrees that emoji can be ambiguous. If there was any chance of confusion about the information a client gave him, “I’d just pick up the phone and give them a call,” he said.

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As for regulators, Solomon confirmed at the FINRA conference last month that emojis aren’t the only form of communication causing panic. Texters often use a shorthand that can be overlooked by automated compliance programs that many companies use to comb through reams of information for words and phrases that may be involved or other red flags, he said. .

Regulators need to consider building a new “dictionary” that takes into account some of these novel expressions, Solomon said.

He also said there were problems with the text-to-speech system – which can be used to transcribe text as it is spoken. Most automated review systems are designed to “absorb” this type of information, he said.

“Nothing creates tension in the industry like out-of-channel communications,” Solomon said.