Move over common blackbird, it seems that Larry the Twitter bird is the new national bird of Sweden. The nation’s daring employment of social media tied its fate to Twitter. In fact, never before has a country’s reputation been so reliant on a winged creature. A few months ago, the Swedish tourist authority decided to hand over its Twitter handle @Sweden to one lucky Swede a week with no strings attached. A risky move, no doubt, but this campaign led to both greater interest and charm. Unfortunately, one user aired some offensive opinions, reflecting that this campaign was not entirely without drawbacks. Presenting a unique predicament, Sweden was faced with either grounding its Twitter operation, or letting the blunder fly and continuing to reap the benefits of its popular campaign. A similar predicament is reaching its boiling point in social media for financial services.
The Financial industry’s Swedish predicament
So, what does this Nordic nation have to do with Wall Street? Well, for many firms in the financial services industry, they feel like they’re Sweden. These firms fear that they are handing over the company’s reputation to any employee with a social media account. They therefore worry that the company remains one non-compliant Tweet away from FINRA or SEC sanctions. However, these same firms also realize that social media has a lot to offer. It can humanize the employees and advisers and help them connect with others just as Sweden was able to connect with those outside of its borders.
Wall Street firms are consequently faced with the “Swedish Predicament.” Do they embrace social media with the reputation and compliance risks, or do they shut it out? Recently, Morgan Stanley finally responded to this social media for financial services dilemma by permitting its 17,000 financial advisers to use Twitter and LinkedIn. Of course, this comes after a pilot period where 600 advisers were given access. Additionally, advisers must use prewritten Twitter messages and have all LinkedIn posts approved. Nevertheless, Morgan Stanley’s head of social media states that for social media, “The big takeaway is that it works.” These are big words for an industry that has been hesitant to adopt social media. And, like Sweden, Morgan Stanley recognizes that the gains to be made from social media are significant.
Resolving social media for financial services
So, is the solution to the “Swedish predicament” that financial firms should unequivocally open social media access to all employees? Well, not quite. The difference between a nation and a business are vast. And, simply handing over free reign of social media presents an array of risks. As such, Morgan Stanley’s social media adoption strategy is sensible, but far from complete. It did not leap into social media as Sweden did, but rather took a measured approach to ensure that its social media policies could adapt to fully address the risks of social media for financial services. And, importantly, Morgan Stanley isn’t done. Although it postponed a pilot program to allow advisers to post independently from prewritten content, Morgan Stanley has made it clear that this is the direction it is headed. This can, and should, be the final goal of social media for financial services. So, although Morgan Stanley chose the same route as Sweden and embraced social media, it made sure it had sufficient policies and experience first. Wisely, Morgan Stanley did not choose to leave the nest prematurely.