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Live Chat for New Clients

Live chats with website visitors could be the future of prospecting, but advisors must first address compliance and personal productivity issues.

Bill Winterberg, 06/13/2013

One growing trend found on many business websites is the use of online interactive chat tools. The "live chat" feature is used for a variety of purposes including general prospect inquiries, customer service, and even complaint handling, ultimately giving consumers more ways to engage a service provider.

Financial advisors could borrow a page from the customer service playbook of large enterprises by offering similar live chat capabilities on their own websites. However, advisors are unclear whether live chat is really worth the effort or if they can even use the feature without encountering compliance issues.

For advisors seeking to be on the leading edge of interactive communication, live chat provides the opportunity to engage prospects and clients in a convenient, interactive way, provided they approach the technology prudently.

What Is Live Chat?
Most Internet users have likely noticed the increased prevalence of live chat pop-up windows in the lower corner of websites. Some businesses even specifically direct customers to a live chat discussion with a customer service representative to resolve a question or issue instead of fielding the question by phone.

Essentially, live chat is similar to a text or instant message sent to friends, but instead, messages are delivered to designated operators within a business organization. Live operators can respond to incoming messages directly or even route specific inquiries to other operators based on message content. Operators can answer questions, provide hyperlinks to knowledge base information, or escalate customer service issues where appropriate.

Live chat can be an attractive alternative to contacting a company by its toll-free phone number, particularly because live chat all but eliminates endless phone trees and long hold times. I can't remember how many times I've said to myself under my breath, "If my call really was important to you, you'd answer it right away!"

Compliance First
With a prudent approach, live chat can certainly increase engagement with website visitors, thereby increasing the odds that they will want to learn more about an advisor's services and ultimately even become clients.

On the other hand, live chat raises concerns over compliance, including questions about what can and can't be discussed, whether chat messages need to be archived, or how a chief compliance officer should supervise chat.

Clearly, any registered representative or employee of a dually registered firm must first check with their broker-dealer's compliance department to determine if live chat software can be used. On the independent RIA side of regulatory rules, advisors appear to have the green light to use live chat.

"Advisors can engage in live chats in a compliant way, but all the same challenges of managing public appearances and record retention go with it," said Christopher Winn, managing principal of Pembroke, Mass.-based compliance consulting firm Advisor Assist. See my column Avoid E-mail Audit Headaches regarding advisor record retention requirements for email communication, which also applies to chat transcripts.

Cindi Hill of San Diego-based Hill Compliance Advisors also supports the use of live chat tools, provided that advisors address straightforward compliance issues.

"First of all, if a live chat is not archived, it's a problem," Hill said. She added that advisors must document in a compliance manual certain policies and procedures that address the unique characteristics of live chat.

"Just as for any correspondence, the policy should address who is responsible for responding to live chats and how those messages are supervised and reviewed once they are completed," Hill added. The same holds true for complaints potentially submitted via live chat. She recommends compliance officers review live chat transcripts when they perform regular reviews of email, blog posts, and other online content, and address any issues by applying established policies.

Is Live Chat Worth It?
With the main compliance concerns out of the way, advisors will next want to focus on the potential impact live chat may have on their personal productivity. It's entirely possible that new chat messages can pop up on an advisor's computer screen several times a day, if not several times an hour for advisors with popular websites.

Erik Evans of Berwyn, Penn.-based GoalQueste said he is contacted several times per month by website visitors, but he doesn't feel it is distracting to his workflow. For Evans, the occasional chat is not enough to deter him from the potential payoff.

"The ability to chat live with visitors is an increasingly useful marketing tool in financial services, but I wouldn't yet call it the norm," Evans said. "Embracing this early on helps add credibility to small practitioners and start-ups."

Evans uses the live chat plug-in called Olark on his website. Olark offers five pricing tiers ranging from a free plan, supporting one operator and 20 monthly conversations, up to an Ultimate plan permitting 15 operators and unlimited monthly conversations for a monthly fee of $243. All Olark paid plans offer integration with popular Web-based CRM software including Salesforce, Highrise, Assistly, or Zendesk.

Evans particularly likes the real-time analytics offered by Olark. "Not only do you get an alert with each website hit, but you can see how they got there, what pages they're visiting, if they are a repeat visitor, and most importantly, how much time they are spending looking at your information," he added.

Most live chat tools like Olark also know when the assigned operator is available for chat or away from his or her computer. Busy advisors can easily disable their live chat availability, but the tool will still prompt website visitors to connect by completing a simple Contact Us form.

When website visitors start a live chat session, advisors continue the conversation using their instant message software of choice. For example, Olark supports Google Talk and Pidgin on Windows, IMO.im for Web browsers and mobile devices, as well as iChat and Adium on Mac, but any chat program that supports Jabber (formally called Extensible Messaging and Presence Protocol, or XMPP) or Google Talk will work.

Selection among live chat providers has increased dramatically as the tools continue to gain popularity on business websites. In addition to Olark, advisors can evaluate options from LiveChat, SnapEngage, ClickDesk, and more. All major providers offer free trials, so advisors can compare features and pricing before making a commitment to one solution.

Chatting for Clients
Those ready to experiment with live chat tools on their websites will find no shortage of options available at a wide range of price points. This type of real-time interactivity is rapidly becoming the default way website visitors engage businesses and customer service departments.

"I think the industry is heading in the general direction of being more accessible and transparent, which is a demand-driven evolution of our marketplace," Evans said. While live chat may be a turn-off for some, advisors have the opportunity to be on the leading edge of engagement with both prospects and clients.

By balancing compliance obligations and the effect on personal productivity, advisors can capitalize on the evolution in communication by reducing friction of the first connection with prospects while also increasing their accessibility for clients.

Bill Winterberg, CFP, is a technology and operations consultant to independent financial advisors. His comments on technology have been featured in a variety of financial industry publications. You can view more information about Bill and see his schedule of upcoming speaking engagements at his Web site, FPPad.com. The author is a freelance contributor to MorningstarAdvisor.com. The views expressed in this article may or may not reflect the views of Morningstar.

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