Bankers explain why they're afraid of LinkedIn, Twitter and Facebook
Investment bankers and finance professionals haven’t traditionally been a big cohort on social media. Bankers eschewed Facebook and Twitter for privacy reasons, and LinkedIn was seen as fodder for recruiters to bombard profile holders with (possibly irrelevant) jobs. Research earlier this year by Michael Page (in France, admittedly) found that 36% of people in finance weren’t on social networks at all.
Are things changing though? LinkedIn has been thedarling of Wall Street ever since its flotation in 2011. Twitter’s forthcoming IPO may not be quite as successful as LinkedIn’s, but does at least mean that no banker can excuse continued unfamiliarity with the micro-blogging site. And bankers are certainly on Facebook – but are a bit paranoid about it.
We asked a selection of finance professionals working across M&A, corporate finance, sales, and private equity about their partiality to social media. This was their response.
LinkedIn: Helpful for spying on other people
Despite accusations of creepiness, LinkedIn has 101,000 financial services profiles, of which 37,000 are investment banking profiles. However, the finance professionals we spoke to said they were careful with the information they posted there.
“You get two or three different types of finance people on LinkedIn,” said the corporate financier speaking on condition of anonmity (as did everyone in this article). “Some people have a full profile and are using it to draw attention to themselves, other people have a very basic profile which they never update and have forgotten about, and some people just create an unpopulated profile so that they can use it to look at the other people who on the LinkedIn network.”
The senior M&A banker said LinkedIn can be handy for due diligence and research when you’re working on a deal. He also said it’s a handy way of differentiating yourself from the bank you work for. “Banks aren’t keen on their employees being on LinkedIn,” he said. “If you work for Merrill you’re a Merrill guy and you’re virtually banned from even saying your name in a meeting – this is a way of getting your name out there as an individual.”
The private equity professional objected to LinkedIn on the grounds that it’s full of people trying too hard to promote themselves: “It’s very self-aggrandizing. I don’t want to read an ‘insightful article’ that someone’s shared about Warren Buffet waking up at 5am.”
But the sales professional said LinkedIn can be a valuable way of escaping a bank with your client list intact. “Gone are the days when you left your job and left all your clients behind and then had to call them one by one when your non-compete was over. Now, you can have all your clients as connections on LinkedIn and you can move them with you. They’re even informed when you get a new job title,” he said.
Facebook: Bad for bankers in the public eye
Facebook is popular among junior(ish) bankers, who all told us they have profiles. It’s also popular with bankers’ wives (“She’s all over it,” one senior BAML banker told us.) Facebook is not, however, popular with senior bankers who are out meeting clients: they are afraid of the photo-tagging.
“I do have a Facebook profile,” the senior M&A banker told us, “but my connections are restricted to a close circle of family and friends. I have to be very careful not to appear in any photographs that might be tagged and visible to clients.”
“You have to be very astute with Facebook and to make sure that you fully understand the levels of privacy on offer,” said the corporate financier.
Facebook has its uses. Robert Karofsky, the former co-head of equities at Deutsche Bank, has set up a Facebook page proclaiming himself as a public figure in finance and philanthropy, for example (although Karofsky doesn’t appear to have posted anything on this page for a while). Karofsky doesn’t appear to have updated his LinkedIn profile, however, which still cites him as Deutsche’s co-head of equities, even though the bank tells us he’s not on its system.
Twitter: Mystification and prohibition
Twitter certainly has its followers among the finance fraternity, some of whom claim it to be more important than Bloomberg for keeping up with breaking news. Pseudonymous tweeters like Epicurean Dealmaker (M&A), Banker’s Umbrella (private banking) and Pawel Morski (fund management) have developed big Twitter audiences. So have macro-economists like Charlie Robertson and hedge fund managers like Anthony Scaramucci.
However, Twitter is very sparsely populated with employees in investment banks who are tweeting under their own names.
There are several reasons for this. “If a job is taking 85% of your waking hours and you’re not allowed to tweet about work, then what have you got to tweet about?” said the salesman. “If I write something on Twitter and there’s absolutely any link to my job then I’ll be into the realms of legal and compliance.”
The senior M&A banker said it made no sense for him to be on Twitter. “It’s fine for journalists to be on Twitter – it’s part of their product set, but what’s an M&A guy going to say? You can’t talk about deals and any general statements you make about the market are going to be incredibly facile – people have been talking the M&A market up for five years, so there’s nothing to say there.”
“What would I say,” asked one senior BAML banker in frank mystification when we asked whether he was on Twitter. “I don’t do anything exciting.”
However, the corporate financier said Twitter has one main purpose among finance professionals: “It’s great for humourous commentary and satire. Otherwise, I don’t really use it.”