Vanguard Dips its Toes into Social Media (with One Eye on FINRA and the SEC)

Taking a look at the world of investing and where many are gathering in the social media, Morningstar.com has a very impressive group of forums and blogs. Over roughly a 3+ year period, there were more than 1.7 million posts on Funds, Stocks and General topics. The big leader in terms of the groups is clearly the very active Vanguard Diehards – with more than 580,000 posts to date. And the Vanguard community is strong across the web. The Bogleheads – followers of John Bogle, founder and retired CEO of Vanguard – had 671 new posts over 98 topics in just one, typical day.

The topics surrounding Vanguard are the usual suspects – typical investing concepts – with ETFs and REITs being pretty popular recently… and the high-level conversation maps that the social media analytic tools display did not reveal any overt complaints. However, the Sysomos social media analytics tool showed a 22 percent negative rating on message boards and a 19 percent negative rating in the blogosphere. In contrast, 44 percent of the sentiment on the message boards and 51 percent on the blogs were positive – so the fans are outnumbering the naysayers. The Techrigy social media tool put the positives at 70% to 30% negatives. The trends are similar, but the difference in percentages is based on the fact that Techrigy does not include neutral sentiments into the mix.

Looking at the official presence of Vanguard in the social media, they do have a Fan Page on Facebook (2,400+ fans) with a social media campaign called “Simple Truths” and an official blog set up in March 2009 that is – frankly – very tepid compared to the conversations of those in groups like the Vanguard Diehards. However, some of their hesitation is most likely based on their concerns about what the reaction of FINRA and the SEC will be.

They addressed these issues directly with their readers who complained about the one-way nature of the blogs – specifically the “no comments” policy. However, they are changing their policy and also providing some guidelines to make their policy clear to their community.

“Because of the regulatory concerns I’ve mentioned, however, we won’t publish all comments, and we won’t publish them right away. We’ll take some time to read and consider each comment, and we maintain the right to delete certain information, such as readers’ names and e-mail addresses. Likewise, we will not publish testimonials, specific advice about investing, or comments we consider abusive, unfair, or off-topic.”

I think that this is a good beginning. They don’t necessarily need to be in the mix with the opinionators. There is still a lot that Vanguard can do to communicate with Vanguard investors (and potential investors) that does not fall under “investment advice”. Understanding concepts, the make-up of various funds, or the philosophy of portfolio managers goes a long way with people who need basic information and who may want to see the faces of the people they are entrusting their future to.

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