Last year FINRA published its social media guidelines as contained in Regulatory Notice 10-06. As discussed previously, broker/dealers are subject to very onerous restrictions when it comes to social media communications. The restrictions are so burdensome it is questionable why a financial advisor would use social media for business purposes beyond general networking.
Morgan Stanley’s social media gameplan was profiled in a recent CNBC story. Brokers will be permitted to use pre-approved messages on Twitter and LinkedIn. Though some commentators are critical of this type of static and pre-approved communications, large wirehouses simply can’t allow representatives to engage in ad hoc product endorsement or discussions. Such an approach will likely run afoul of FINRA regulations and subject the company to unnecessary exposure.
So, Morgan Stanley will enter the social media fray slowly and others are sure to follow. The bottom line is financial advisors cannot ignore the popularity of social media sites and opportunities to communicate with prospective and ongoing clients. Easier said then done in this highly regulated industry.