Buy Side Warms to Social Media08.19.2011
Social media websites such as Facebook and Twitter have graced all aspects of modern society as the future of communication, and the markets aren’t left without a social media imprint. Sell side banks, brokerage firms, credit card companies have warmed up to such sites, notably Twitter and buy-side firms are catching on.
“Trends in terms of social media in the money management space have been slow because of the compliance concerns,” said Alan Maginn, senior analyst at Corporate Insight, a provider of industry analysis and trends for financial services companies.
Unlike the sell side who can get involved with little initial investment, Maginn described that social media initiatives at asset management firms are much more moderate and restrictive.
Yet, leaders in the money management field, have pioneered social media campaigns as a way of interaction with their customer base—extending the role of social media beyond marketing. Maginn noted Vanguard as an avid social media user, with a blog, two Facebook pages, and a Twitter feed.
“Vanguard is interactive on their social media sites—re-tweeting when people mention them, doing their best to do more than just post content,” Maginn said. “They’ve been successful because they know it can’t be all about them. It’s more than just self promotion, otherwise, you won’t intrigue people to come back and follow you.”
While some firms treat social media as much more than an extension of their marketing umbrella, Maginn reported that they do channel their social media initiatives towards wealth managers and financial advisors as a means of communication with clientele.
“The buy side definitely wants to get more involved with social media. At first, there was confusion about who would cover the role of managing social media accounts…is it public relations, or marketing, or IT or compliance?,” said Maginn.
“But now, people are specifically dedicated to it, by either enhancing their current roles or companies will create an entirely new role for people to be in charge of this. They’re not leaving behind other mediums, but they’re supplementing their messages with social media as a new communication channel.”