Morgan Stanley to Expand Access to Social Media

Due to securities regulations, Wall Street firms have traditionally blocked employees from using social media tools such as Twitter and LinkedIn. However, these firms are now tiptoeing into the fast paced and open world of social media. Morgan Stanley recently announced that they plan to give 17,000 financial advisors partial access to Twitter and LinkedIn so to effectively communicate with their clients and tap into to a larger market.

The caveat to this exploration is that financial firms are limited in what they can say on social media. For one, there is huge downside financial and reputational risk if information is not within the scope of regulation. This is why, for example, all Twitter messages at Morgan Stanley are taken from a prewritten library of messages, and that all LinkedIn messages have to be pre-approved by Compliance.

Start-up firm Socialware is advising financial firms such as Morgan Stanley on its social media initiatives, and providing a software that helps pre-approve messages.  Also, interestingly enough these financial giants are hiring “social media community managers” to lead the entrance into social media. These prove that there is an increased focus and willingness to invest in social media.

The questions to the class are: why is the profile of a financial firm on Twitter or LinkedIn so much different from any other business?  Do you think it is a coincidence that Morgan Stanley is making these large social media strides given they were the lead underwriter in the Facebook IPO? Does pre-approval of messaging take away from the allure of social media and how do you think customers will respond?

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4 thoughts on “Morgan Stanley to Expand Access to Social Media

  1. I suspect that it’s going to work until it doesn’t. That is, MS will allow some usage but once something nasty gets out, they will “refine” their position and clamp down on what’s said online.

  2. Canned, approved messages defeat the purpose of social media, which is a more intimate connection with users. I believe that Morgan Stanley feels like they are embracing the trend, but in fact, are making themselves look guarded and old-fashioned. I completely understand closely monitoring social media from a compliance and security standpoint, but think Morgan Stanley is taking it too far and making it too impersonal by having a databank of approved messages.

  3. I understand if a company blocks its employees from using certain sites. This is a good move by Morgan Stanley to embrace social media, even with some compliance. However, anyone with a smartphone can use apps or websites that is blocked within a company.

  4. I think the fact that messages will be pre-approved will definitely slow down the process and MS will not be able to reply in a timely manner. Also, taking out the personal element from their social media messages will not allow the firm to better get to know and serve their clients.

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