As Wall Street embraces the inevitable tide of social media, fiduciary responsibility is taking on new parameters.
In a different kind of security risk as Morgan Stanley Smith Barney is stepping up its social media reach, granting its 17,000 financial advisers partial access to Twitter and LinkedIn over the next several months. The move expands a year-long experiment with 600 employees to test whether social media would be a helpful tool for its employees.
Of the 600 advisers involved in the trial, 40% cited new business through their social media use and of those 240, 60% said those new customers had more than $1m worth of assets. “The big takeaway is that it works,” commented Lauren Boyman, director of digital strategy at Morgan Stanley Smith Barney, to the New York Times.
Employee tweets will be fairly vanilla in order to comply with securities regulations, and those tweeting or posting must draw from a prescribed archive of Twitter messages and submit LinkedIn postings for approval via Socialware software. “It’s a lot harder to approve 140 characters than one might think it would be. Pretty much every tweet has a link to a report or an article or a Web site, and all that has to get read and approved,” said Boyman.
“For all of the criticism that Morgan Stanley has taken around this initiative, I would challenge anyone to show another firm of their size that is taking as aggressive an approach toward making social a strategic part of their business,” said Chad Bockius, CEO of Socialware.
“Two years ago social media was kind of the Wild West on Wall Street, there wasn’t a lot of direction from regulators” Boyman told the Financial Times. Since then, the Financial Industry Regulatory Authority has issued guidelines for brokers’ use of social media but the industry in general is moving forward with caution.
The prescribed library of acceptable messages has been criticized by advocates of the essential spontaneity of social media. A trial group of 20 Morgan Stanley Smith Barney advisers will write their own tweets as a test balloon for broader company access. The full roll-out begins next month, coinciding with Morgan Stanley Smith Barney’s final integration of its two broker units begun in 2009.
Despite taking a measured approach to social marketing, Morgan Stanley doesn't want to be percieved as a social media loafer — indeed, the firm wants to be a leader in the Wall Street social media world, along with Goldman Sachs, a regular on Twitter and recently looking to hire a “social media community manager.” The Blackstone Group maintains a Twitter account, while AllianceBernstein also has given their employees access to LinkedIn.