Yet for Wall Street, social media constitute a largely untapped marketing opportunity.
So a cottage industry has emerged. Adept start-ups act as guides on Wall Street’s social media adventure, providing the software that helps firms comply with regulations that date to a sleepier era of communication.
“Here they were, these organizations that had never used the social networks because they had completely locked down access,” said Chad Bockius, the chief executive of Socialware, a start-up based in Austin, Tex., that advises financial firms on social media. “This is the same thing we saw when people started to use the Internet for business purposes.”
Mr. Bockius, 35, says his company was the first to offer social media compliance products for the financial industry. Socialware sells software that can archive messages, house a library of prewritten content and allow compliance officers to oversee postings.
Guardian Life, the insurance company, has used Socialware’s software to give its sales force access to LinkedIn and Facebook. AllianceBernstein, the asset manager, relies on Socialware for its group of advisers on LinkedIn.
Morgan Stanley Smith Barney, which Mr. Bockius holds up as one of his most enterprising clients, gave about 600 of its 17,800 financial advisers access to Twitter and LinkedIn last summer, and now plans to expand those ranks.
“We’re trailblazing, so to speak,” said Lauren W. Boyman, who runs social media at Morgan Stanley Smith Barney. “Even with the restrictions that we have, we’ve seen a lot of success.”
But even as firms preach the benefits of a social media presence, the reception online has tended toward the mocking.
“You’re not going to build up a real following in social media if your tweet is, ‘It’s a beautiful day at Morgan Stanley,’ ” said Joshua M. Brown, a financial adviser at Fusion Analytics Investment Partners, who runs the Reformed Broker, a popular blog. “If you’re working within the large firm framework, it probably has very little value at this stage in the game.”
Ms. Boyman said internal statistics showed that financial advisers were successfully engaging with clients over Twitter, adding that prewritten messages help streamline the process.
The costs of a mistake are high. Thomas A. Pappas, vice president for advertising regulation at the Financial Industry Regulatory Authority, Wall Street’s self-regulator, says it is no easy task overseeing communication on sites that were intended to issue messages at a rapid-fire pace.
“It’s scary for compliance officers and firms,” Mr. Pappas said.
Last year, the regulator suspended a California-based broker, Jenny Quyen Ta, claiming that she had praised certain stocks on Twitter without telling her firm she was doing so, or revealing that she personally held stakes in some of those investments.
In January, the Securities and Exchange Commission accused Anthony Fields, an Illinois-based investment adviser, of offering to sell “fictitious” securities on LinkedIn.
Still, firms are forging ahead. Deutsche Bank has allowed Ted Tobiason, a San Francisco-based investment banker, to use Twitter. Mr. Tobiason, whose postings must be approved by the firm’s branding and compliance departments, posts about initial public offerings.
Wells Fargo, in an effort to communicate with homeowners, has put a group of mortgage consultants on Facebook. Those employees can post from a library of preapproved content, but they are also encouraged to compose their own messages and “be personal,” said Timothy J. Collins, the bank’s senior vice president for experiential marketing.
For Morgan Stanley Smith Barney, networking on social media hasn’t yet turned into a measurable stream of dollars. In the latest phase of the firm’s experiment, a group of 20 financial advisers can write their own Twitter messages. Of course, the postings must be approved by the compliance department before going online. The process can take several hours.
She didn’t write it, but Fay DeBellis, a Minneapolis-based adviser for Morgan Stanley Smith Barney, had posted “Next stop Dow 57,757?” Her version happened to be the 2,000th Twitter message by a Morgan Stanley adviser, a fact noted in a congratulatory article on the firm’s internal Web site.
Still, Ms. DeBellis, 47, says she has not won any business from Twitter. She has had more success on LinkedIn, which she said brought her about $10 million worth of business over 18 months.
Ms. DeBellis, who manages more than $100 million for clients and who says she checks Twitter “randomly,” first used her account to track the location of food trucks near her office.
“There is a learning curve,” she said. “I feel like I’m on the forefront of a new frontier.”