subject: Financial Services Social Media: Progress, But A Long Way To Go [print this page] While many companies, most notably those dealing in consumer products, have made tremendous strides in harnessing the power of social media, the financial services industry is taking baby steps with its financial services social media programs.
Of course, the financial industry, given its highly regulated nature, tends to be conservative (some might say boring). For example, there are strict rules governing what and how financial advisers and brokers can communicate with their clientele. Broker-dealers are mandated to keep records of their external messages, which typically require approval from their compliance departments. All of this may be hampering the full scale deployment of financial services social media programs.
Of course, social media is way too powerful to ignore just think of all the ways there are to reach you these days and the Financial Industry Regulatory Authority, better known as FINRA, has issued guidance on the area of financial services social media on two occasions.
The industry is closely watching Morgan Stanleys recent forays into the world of Financial Services Social Media. Morgan Stanley Smith Barney will allow its nearly 18,000 financial advisers to use Twitter and LinkedIn in limited ways following a test period. And, while many people tweet about where theyre having lunch, among other inane things, Morgan Stanleys army of advisers will be using messages approved by the firm for their financial services social media programs. Of course, some might believe that this runs counter to the very nature of the medium in that it tends to be one that encourages rapid and often spontaneous communications a dialogue, rather than a monologue. Further, if everybody is sending out the same messages, could this be considered spam? Some at the firm will be allowed to pen their own tweets. However, at least the effort by Morgan Stanley marks a step forward towards furthering the cause for financial services social media.
We expect more firms to jump into the financial services social media fray. Think of this way: Remember the debut of the ATM? While somewhat in dispute, it is believed that the first such device debuted at a Chemical Bank in 1969. Today, there are in excess of two million.
Clearly, the growth of financial services social media will continue unabated. New uses and new technologies will most likely continue to appear at a rapid clip, perhaps outstripping the abilities of the regulatory authorities to keep pace. In the meantime, financial services firms and the legions of compliance officers are advised to watch for additional guidance as well as to establish policies governing the use of financial services social media.
