Case Study: Morgan Stanley Smith Barney advisers allowed partial access to LinkedIn & Twitter

In June 2011, Morgan Stanley Smith Barney (MSSB) allowed a test group of 600 advisers, almost full use of LinkedIn and restricted use of Twitter and after a yearlong trial the Wall Street firm allowed 17,000 financial advisers partial access to Twitter and LinkedIn significantly increasing its social media presence. According to the 600 advisors involved in the trial, 40% cited new business through their LinkedIn & Twitter use, and of those 240, 60% said those new customers had more than $1 million worth of assets. According to Lauren W. Boyman, the firm’s head of social media, using Twitter & LinkedIn has helped financial advisers win more business over the past year and Advisers who have used the platforms have come to think of LinkedIn as a tool for networking and finding clients, while Twitter allows them to have more direct marketing campaigns. The full social media roll out across Morgan Stanley Smith Barney allowing access to all 17,000 advisers was always there and the firm had to do the trial to make sure that it has the capability & policy in place so that they can monitor, archive and manage the social media content as there are stringent regulations by the Financial regulators like SEC who had mandated the same rule & guidelines as in the case of email and physical communications & content.

Morgan Stanley’s risk management committee has given the go-ahead for all of the retail brokerage’s financial advisers to use the two sites.To comply with stringent rules governing what and how financial advisers & bankers can communicate, financial advisers of the firm will tweet only prewritten tweets from preapproved library and submit all LinkedIn postings for approval, using software designed by Socialware, and through this software the firm tracks and captures communication of its brokers and retains it for regulators. For using LinkedIn, advisers have to set up a profile that discusses their practice and specialties, receive compliance training, submit all LinkedIn postings for approval and can use all the LinkedIn functions--from requesting an introduction to search features to joining groups which are powerful networking tools and thus increase business. In case of Twitter account advisers can only tweet prewritten tweets from preapproved library, which contains content related to reports on market moves; the firm’s research on investment strategy; wealth management topics such as retirement, women and wealth and divorce; and general lifestyle content. According to Lauren Boyman, wealth management themes tend to do particularly well, and are frequently retweeted on Twitter.

In case MSSB Advisors require help with the LinkedIn, Twitter & their business usage have to contact firm’s business development organization which will guide them in term of how to use the sites and also a call center is established to answer adviser questions and finally advisers can also seek additional coaching from technology vendor Socialware. A lot of financial advice is emerging from many growing sources and technologies like blogs, Twitter, and LinkedIn, etc. and all the Financial Institutions like Retail Banks, Wealth management Firms, Investment Banks, Asset Management firms, etc. have to see this content as a competitive threat and should also make themselves present on the various social media platforms as the customers are becoming more social media savvy and social media has become an integral part of their day to day life. MSSB is successfully using social media in client interaction & Business Development.

Case Study: Social Media presence of Goldman Sachs: Looking to improve presence

Despite being one of the biggest investor in Social Media companies like Facebook, Goldman Sachs presence on Social networking sites like Facebook, Twitter, LinkedIn and YouTube is quite lackluster. Goldman Sachs joined Facebook in June 2009 and till now it has only 20,000 fans, mere 16,000 likes which is far below when compared to its peers in the Financial Services industry and also has many negative comments about the bank on the Facebook page. It started its twitter account in May 2012 and since then it has 22,000 followers and the twitter account highlights the events, work, research and employees.  Goldman Sachs official twitter account is nothing compared to a parody feed called @GSElevator Gossip, which has over 320,000 followers which reports the various conversations overheard in the bank’s elevators. Goldman Sachs LinkedIn presence has 90,000 followers and is limited to job openings, recruiting interns and informing about employee update and new hires. In February 2012, Goldman Sachs launched YouTube channel and it features videos of employees discussing careers; experts interviewed on topics such as the global economy; clients talking about relationship & work and its corporate citizenship programs. Goldman Sachs is looking to hire a fulltime social community manager who will manage its social media presence and will also monitor the activity.

The reason for such a lackluster presence for Goldman Sachs and slowly improving social media presence for most of the Banks and Financial Institutions is due to the stringent financial regulations by the regulators. Broker, dealers, Relationship managers must comply with very stringent regulations regarding communications with their clients which had become a negating factor. The SEC and FINRA quickly classified social media interactions as records just like emails or physical communications which means they must be archived and managed according to the same rules and which also means tight policing and steep sanctions these institutions face in terms of violations from the SEC/other regulators will also be applied to social media records. Most of the financial institutions were not confident that they could comply with such stringent regulations while using social media so they avoided using it. But there are significant benefits in using social media like advisors/traders/relationship managers can build trust with clients, network more effectively and use social media as a marketing tool for more business and with new tools available that help in archiving and managing social media interactions effectively, Goldman Sachs and other Financial institutions & banks have been actively improving their social media presence. Social Media policy is in place and employees are being trained in terms of how to utilize and manage the social media presence, regulatory aspects and precautions to be taken during client interactions is also provided to all the client facing teams.

Banks & Financial Institutions need to understand that the new era financial customers, clients and public are social media savvy users which also has become an active part of their day to day lives and Social media is disrupting the financial industry with the emergence of social media real time money, investment and trading communities and crowd financing which is funding new players. All the above factors have forced the financial institutions to enter the open and transparent world of Social media. Goldman Sachs too is following and improving presence.