Tweets are 'static content' in the eyes of Morgan Stanley Smith Barney, which operates a network of 18,000 financial advisors.

Five months into a pilot test with 600 of those advisors, the product of the 2009 union of Citigroup’s Smith Barney brokerage with Morgan Stanley's Global Wealth Management Group is trying to find ways to “turbocharge” prospecting for clients with social media and encouraging offline interaction with them.

But when it comes to making sure it doesn’t run afoul of securities industry regulation of communications with customers, existing or prospective, the company is maintaining its policy of pre-approving all tweets – and creating almost all of the tweets centrally based on company research or investment strategy or branding initiatives.

"We consider every tweet to be static content requiring preapproval,’’ at this point, said Lauren Boyman, the firm’s director of social media on a Web seminar held by online publisher Fierce Markets.

The distinction is this: Interactive communications must be captured, recorded and stored for possible future review, in the same fashion as electronic mail, in Morgan Stanley Smith Barney’s reading of the regulatory environment.

Which leads to its defining of tweets as “static content” that must be reviewed in advance of sending, even if only 140 characters long.

“Static” content such as profile information on a social networking site or a blog posting will generally be considered an advertisement that requires firm approval before use, by the guidelines set out by the Financial Industry Regulatory Authority, which oversees brokers.

“We are getting used to new medium,’’ she said, and the company will go on the offensive when it is comfortable it has a suitable approach.

She has previously acknowledged that the company’s advisors chafe at the requirement for pre-approval, but she noted that they can communicate interactively with customers on LinkedIn, the social networking site for professionals.

“At the end of the day, it’s critical to meet” regulatory requirements, said Chad Bockius, the chief executive of Socialware, which helps firms manage their interactions with customers.

While Morgan Stanley Smith Barney and other securities brokerages sort out their social media options, the prospecting aspect can get a boost by integrating details about customers held in their customer relationship management systems, said Jason McDermott, vice president of financial services for a supplier of such technology, NexJ Systems. This could, in theory, help target even pre-approved tweets to their particular interests, from sports to college planning.

Sending out tweets, in any case, is not as easy as it sounds, said Boyman.

“Finding what to say on social media is actually a pretty big task,’’ said Boyman. “Most firms don’t find their [financial advisors] are sending out unique content, even given the option.’’  

-- This article first appeared on Securities Technology Monitor.




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