Big brokerage firms are inching into social media, but the industry is still miles away from making full use of all that Facebook, Twitter and other such sites have to offer.

The Morgan Stanley brokerage joint venture Morgan Stanley Smith Barney told its advisers on May 25 that it will soon allow expanded use of Twitter and LinkedIn Corp.'s LinkedIn. Meanwhile, Bank of America Corp.'s Merrill Lynch says it is increasing access to LinkedIn.

In theory, online social networks are an advisers' dream. Not only do they offer an easy way to increase interaction with clients, but they also provide a virtual map for prospecting new business. On the flip side, the sites present a regulatory nightmare for the brokerages, which will have to monitor and save every tweet and update from their thousands of advisers.

The Financial Industry Regulatory Authority, Wall Street's self-regulatory watchdog, regulates business content in a couple ways. Static communications, like advertisements, have to be approved by a registered principal, who is a company representative licensed by regulators to green-light sales materials. This category covers LinkedIn and Facebook profiles that advisers don't update or change.

Another category is interactive content, which covers most email communications, as well as tweets, posts and texts on mobile phones. This content doesn't need to be pre-approved, but has to be supervised. Also, companies have to keep records of both types of content for at least three years. (The rules do not cover advisers who use Facebook and other sites for purely personal reasons.)

Morgan Stanley Smith Barney is relying on technology from the software company Socialware, which will automatically capture and archive social media communications and route them to Morgan Stanley Smith Barney's in-house supervisory systems.

Plenty of advisers' from the big brokerages are already making full use of LinkedIn, simply judging by their activity there. Indeed, Morgan Stanley Smith Barney acknowledges that, to some extent, it's trying to catch up with its own advisers.

"Part of this was making the illegal legal, and giving them a way to do this in a compliant fashion," said Lauren Boyman, the company's director of social media.

Before now, Morgan Stanley Smith Barney advisers were allowed to have static profile pages but were not permitted to post updates or to connect to new contacts. Under the new initiative, advisers will be able to connect with new contacts on LinkedIn. They'll be able to choose status updates and tweets for Twitter to post from a library of preapproved messages, which will often include links to research, videos and other content.

The company says it hopes to find a way to let its advisers create their own posts. Facebook isn't in the initial rollout, but it may be included down the line.

Merrill Lynch does not allow advisers to use Facebook or Twitter for business. Wells Fargo & Co.'s Wells Fargo Advisors said on May 25 that it was working on some new approaches to expand advisers' ability to use social media. Right now, Wells advisers are only allowed to have static profiles that have been approved by compliance. UBS AG's UBS Wealth Management Americas says it's exploring its options and currently allows a "basic function" of LinkedIn.

Branching out in social media takes guts for the big brokerages, said Stacey Haefele, chief executive of HNW, a marketing firm that focuses on the wealth market. "Unfortunately, we live in a litigious society, and the big firms are targets," she said. "So it does take courage to advance yourself in a relatively new medium, in that environment."

But the lack of access to Facebook is costing the advisers important connections to wealthy clients, Haefele added. HNW surveyed about 1,000 high-net-worth clients last year and found that 45% were on Facebook, 26% had LinkedIn pages and 13% used Twitter.

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