Financial Services Firms Finally Making the Move Into Social Media Marketing

Banks, brokerages and other conservative financial services industry firms have been very, very slow to adopt social media marketing practices -- and for good reason.

The regulatory environment for financial services firms that sell their services to individuals and businesses is very strict, particularly around the kind of "loose talk" that is so common in social media. The companies employ very highly paid "compliance" officers, using trained and experienced corporate lawyers, whose job it is to say "no" to most of the kinds of marketing that unregulated companies use on a daily basis.

But to ignore social media marketing is to stay in the buggy-whip era when everyone else is moving to gas-powered cars.

How to get around the problem of strict regulation? One solid strategy is for financial services companies to create a library of approved content that staff members can tweet or blog or post on Facebook. Another is to use third-party software from players like Hearsay and SocialVolt that is built to allow Compliance to review social media posts before they go out. Firms such as Northwestern Mutual and Morgan Stanley are starting to test these sorts of initiatives.

But make no mistake -- this is still a difficult industry to move in to the social media. Scary example: it's not okay for a Facebook user to "like" a post by an investment adviser, as it constitutes illegal word-of-mouth marketing. I get the regulation, but sheesh, something is going to have to change, since social media isn't going away.