While entertainment and consumer product companies have been dabbling in social media since at least 2005, financial firms have been slow to react.
But in the last year, retail brokerages in particular and banks have increasingly been using social networking to communicate with clients, according to a new report by marketing and research firm, Corporate Insight.Six of the 20 brokerage firms studied in the report now have YouTube Channels.
Zecco, OptionsXpress, Scottrade, Vanguard, Wells Fargo and E-Trade all use their Channel to re-run TV ads and, with the exception of E-Trade, to present the investing ideas and tools that are available on their website.
Their largely conservative videos are far, of course, from going viral - but the top ones have garnered over 3,000 views.
One of these is Zecco's Investing Basics Tutorial, which, taking the "money honey" concept a step further, features the three popular "Zecco Zirens" as presenters showing potential investors how to create a diversified portfolio.
"Investing doesn't have to be complicated, especially not with me on your side," Zecco's Liz tells YouTube viewers.
Beyond YouTube, many of the brokerages actively involved in social media - including TradeKing, Schwab, Zecco and Scottrade - have also created online communities, which they are pro-actively maintaining. These communities are targeted primarily at self-directed investors and small business users.
Not all financial firms have been quite as active on the social media front, though. While retail brokerages have been the social media hotspot to date, full-service brokerage firms haven't entered the fray, according to Corporate Insight.
"It will be interesting to see whether they can use this technology," says James McGovern, Vice President of Consulting Services at Corporate Insight, one of the authors of the report.
"They face a critical challenge in the next few decades as they try to retain billions in accounts assets that will pass from longstanding clients to their Gen-X and Gen-Y children."
Mutual fund companies in particular have been holding back. While most expressed their desire to incorporate social media into their web sites, none were able to point to any concrete plans.
Compliance concerns and a conservative approach to the Web is what is holding them back, according to McGovern.Entertainment and consumer product companies have been dabbling in social media since at least 2005. But until now, financial firms had been slow to react. Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio