Since it has become the norm to use social media, many companies have instigated strict policies as to how employees use these networks, or have even forbid their use completely. Unsurprisingly some of the most restrictive policies are amongst Wall Street companies where social networks could be used for insider information.
Now Morgan Stanley Smith Barney is to be the first major wealth manager to allow its brokers to connect with clients through Twitter, and has joined other Wall Street firms in allowing employees to use LinkedIn.
Morgan Stanley Smith Barney plans to phase in these changes gradually and will initially allow just 600 advisers to use social media from late June onwards. These 600 advisors will be closely monitored before the change is gradually rolled out to the rest of the company's 17,800 advisers over the next six months. The initial group consists of members of the "Chairman's Club," along with another 100 advisers who are currently testing LinkedIn as a social platform.
New regulations introduced by the Financial Industry Regulatory Authority make it necessary for Morgan Stanley to install technology which will log all social media interaction by employees. These regulations mean that brokers cannot post content that hasn't been approved by the firm. In addition Morgan Stanley has its own specific rules about LinkedIn that disallows financial advisers to recommend themselves or others.
The use of social media within Wall Street does have a sense of inevitability about it, and the US Wealth Management Boss of Morgan Stanley, Andy Saperstein views it as being necessary for communicating with clients.
He is quoted as saying "the emergence of social media has changed the way in which people communicate with each other and companies interact with clients."
It remains to be seen how many wealth managers will follow Morgan Stanley’s lead.