When Jamie Cox first started using Twitter, he felt as a financial advisor it couldn’t have been more of a waste of time. Getting every post approved before it went live meant a drag before he could get his ideas up in front of followers, clients and prospects, defeating the purpose of a real-time, conversational medium.

“Twitter is very actionable and of the moment,” says the managing partner of the Harris Financial Group in Colonial Heights, Va. “So that was not useful and I disregarded it.”

With more than 14,000 followers today, Cox is clearly in a different mindset. As @jamesacoxiii, he tweets about the U.S. economic outlook and business updates and even about the upcoming Presidential election, tossing the 140 character posts any time the urge strikes. 

What changed? Rather than submit his tweets for approval, Cox now has his posts captured by his independent broker/dealer LPL and reviewed for compliance after-the-fact. It adds to the risk, somewhat, but for experienced financial advisors, those are outstripped by the benefits of leveraging Twitter as a way to communicate with his clients, who coincidentally, consist largely of telephone and utilities employees who are saving for retirement.

A Big Waste of Time?

Yet Cox is in the minority. Most social media use in the financial services industry is strictly limited, especially among bigger Wall Street firms where the real-time use of many social media channels is prohibited. Even if you can get an account on Twitter, and at some firms these are allowed only to small beta test groups, you can only post what’s been pre-approved by a compliance officer. Some companies support libraries of approved (read: canned) content that clients can use on social networks, but in those cases one has to ask, “Why bother?”

As it turns out, generic tweets scrubbed by bureaucrats aren’t particularly, well, social. But putting the reins on social media — which most firms do in some way because of regulations — can turn advisors’ efforts in social media into a big waste of time. They can say they’re on social, pointing to the occasional rep who makes a connection which leads to an account, but it’s not really social. It’s broadcast.

Perhaps a client comes over the transom from this pushed-out commercial. Perhaps a few from a web site. And perhaps one or two will come through a pre-written, pre-approved tweet. But 15 new clients? The number Cox has acquired since heading out on social media? That’s only going to come when you can open up, and are able to post about the economy, your favorite airline and even a new testosterone cream.

“For the first time, social channels are giving advisors the opportunity to have a personal moment,” says Cox. “Social media changes the game entirely. It allows you to build a relationship in a different way.”

Social media channels from LinkedIn to Twitter, Pinterest to Facebook have taken hold across the globe astronomically. Americans spend 24 percent of their time online at social networks and blogs, according to Nielsen’s 2011 Social Media Report. Facebook has nearly a billion global users, 552 million of whom are active on the site daily, while Twitter has 140 million active users, and LinkedIn counts 175 million members.

It’s safe to say that social media is the world’s latest obsession, disrupting old pastimes like TV, not to mention good old face-to-face conversation. And it’s clear we’re still in the early innings. New, specialized networks continue to pop up, such as Pinterest, which has amassed a following since it launched in 2010 with 11.7 million monthly visitors from the U.S. alone. While the site, where users post boards with images, is not really being picked up by advisors and broker/dealers yet, it’s a site many may want to pay attention to as it’s now the No. 3 most popular social network according to an April 2012 report from Experian Hitwise.

Advisors are understandably eager to take advantage of both building their brands but also connecting on a deeper level with current clients. Indeed an entire niche industry has bloomed to help make the industry more social while complying with financial regulatory rules, but more often than not the result is content that has been pressure-washed, neutered and wrung dry of any color, personality or life. 

“It’s best to think of it as a dialogue,” said Porter Gale, a marketing consultant and author who spent four years as head of marketing at Virgin America, a consumer brand that found its voice early on in social and then reaped the benefits. “It’s definitely best if more people are in the conversation.”

But while consumer brands have spent the past three years figuring out networks like Facebook and Twitter, the financial industry remains locked in the pre-2007 Internet mostly due to a plethora of rules surround the way an advisor can communicate with clients or prospects, and what they can talk about. With social media those rules are FINRA’s 10-06 and 11-39

The worry from regulators that reps need to be monitored to make sure they don’t mislead investors and the public is understandable, particularly on the heels of the most dramatic financial downturn since the Great Depression. Yet while daunting, some firms are starting to allow advisors —like Jamie Cox — a little more leeway with post-approval for compliance. It’s a concept that allowed reps to eventually use email, another basic and necessary communications tool.

But while email has stayed pretty much the same for 20 years, social is evolving quickly. The concept of tweeting — or micro-blogging — didn’t really exist before 2007, and networks evolve and change without notice. Google entered the game in 2010 with Google+, which ties social profiles closely to search marketing.

What won’t change is the mega trend, and that’s the trend toward more connections between people and brands. “It gives you the opportunity to have a two-way dialogue with people who are interested in your brand and that’s a big shift,” says Gale. “In the past marketing was one-way.”

Knowing how to engage in that conversation could produce a radical change for reps eager to grow their business. A recent answer from advisors on what wish they “were smarter about,” was finding new clients — 65 percent in fact stated that as their top answer in a recent WealthManagement.com survey. 

Pushing out canned messages that broadcast the name of a firm? Just stop. Commercials are obvious to any consumer of media today. We know when we’re being sold something — a car, bicycle, can of beans. But that’s not what social media are genius at. Most people know innately why they use it personally — they connect with friends, hear about interesting stories, vote on whether a pal should keep their vacation beard, images attached. It’s interactive, it’s fun. It’s not where we broadcast about our latest new upgrade. We can and some do. But that’s boring, and in social media people are voting every day with their likes, pins, follows, re-tweets and favorites.

While a firm might post about a new financial services firm new seminar coming up, or it’s thoughts on global investing, individual advisors are finding out the personal stuff matters, and can be a selling point, such as a TwitPic from your rep of falcons. Or better, their recent attempt at making waffles. Because that’s where social media’s power lies — as a way to establish commonalities so other people come to believe they know and trust the messenger. If you can’t do that, it may be time to just pull the plug.

“My team recently purchased me a waffle maker, and when I posted the first batch of waffles I made, I got a lot of responses,” says Winnie Sun, managing director and founding partner of Sun Group Wealth Partners in Irvine, Ca. who tweets as @SunGroupWP, and has an account on Facebook as well. “My clients love to see my personal side.”

Porter Gale, social media author and digital branding expert, offered tips for those handicapped by regulations and firm policies on how to digitally network.

1.  Retweet: If you can’t craft your own post or message, consider pushing valuable advice you see elsewhere on channels — once they’re approved, alas. “What advice could they list that helps people better understand the market, investing or trends,” says Gale. “Maybe they take on a role as a curator instead of posting propriety information that needs to be approved.”

2.  Use Analytics: Perhaps you’re on Twitter and Facebook, but not able to use your voice. Yet. You can still build a following by combing through other users and seeing their followers, such as the CEO of a firm you might want to reach one day. “If you follow them, they might be willing to follow you,” she says. “That might become a way to break through.”

3.  Networking: Don’t neglect potential offline partners — people who can trade assets or contacts without connecting through social media. “It's not necessarily that you shouldn't use social media but it may be more effective to go after other channels, like email,” says Gale. “Time and resources are precious and you want to use them wisely.”