From the August 2012 issue of Research Magazine • Subscribe!

July 26, 2012

Morgan Stanley’s Social-Media Drive

While rivals are working behind the scenes, Morgan Stanley is moving publicly—and quickly—to embrace social media, experts say. The Wall Street firm said recently that it would allow its 17,000-plus advisors to use Twitter and LinkedIn with certain restrictions.

Morgan Stanley shared its initial social-media push with the press and investors about a year ago. That’s when it let 600 or so advisors start a pilot program.

“We have a library of preapproved content,” said Lauren Boyman, director of social media at Morgan Stanley Smith Barney, in an interview. “We view the library as another distribution channel of the content that advisors send out to clients and prospects all the time.”

Some other wirehouse firms are, of course, also embracing social media—though not to the extent that MSSB is. “Many firms are quietly working on these initiatives, but they are not disclosing” much about their social media efforts, said Chad Bockius, CEO of Socialware, Morgan Stanley’s tech partner, in an interview. “I can say that Morgan Stanley is, without a doubt, the furthest along. It’s been the most aggressive with its rollout and the associated steps that have to be taken with this.”

Such efforts could prove helpful to MSSB as it wraps up the tough task of integrating Morgan Stanley and Smith Barney advisors onto one information-technology platform. It is also facing plenty of pressure from other broker-dealers on the recruiting and retention fronts. Raymond James Financial, for instance, most recently attracted four ex-MSSB advisors in Westlake, Ohio, to join its independent channel with about $400 million in client assets.

“Anytime a firm goes through any type of transition … advisors may leave opportunistically,” according to Mindy Diamond, president and CEO of Diamond Consultants, a recruiter for Morgan Stanley and other firms, in an interview. “Once the transition is over … advisors should be wowed by the technology.”

Preapproval Process

Financial materials sent online are tightly regulated, and this situation makes it important for Morgan Stanley to preapprove tweets and other online messages, says Boyman. Plus, advisors are busy professionals, and it takes “a lot of work to come up with content” to push out via social media, she explains. That makes “turnkey”—or preapproved— content easy for advisors to use.

When it comes to timely market content, for instance, that needs to get out during an event like the Flash Crash or a day with significant market movement, “We have tweets available from our research group,” she said.

Morgan Stanley’s pilot project does include some content that’s not preapproved. Lifestyle content—that has to do with topics like golf or cooking—is less stringently regulated and is a good way to connect with clients, Boyman adds.

In general, she explains, Morgan Stanley knows the importance of getting advisors to connect more with current and prospective investors online. “For the next generation that is looking for an advisor, the expectation is there: They will find that person on LinkedIn and will find out who that person is linked to as part of the background they’re searching for.”

In its pilot program over the past year, most Morgan Stanley advisors using social media on a daily basis found that they were able to attract new clients with $1 million and more in assets. In other words, the time spent online translated into business results, the firm says.

“This is a step in the right direction,” when it comes to connecting with both clients and with other advisors, Diamond added. “It will help them develop business that they couldn’t develop in other ways. It’s very powerful and important.”

 

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