If you’ve been following this blog for a while, you know that Corporate Insight has been monitoring financial services firms and their use of social media for over a year now. In late 2008, we published the industry’s first comprehensive study of the subject, Social Media: Trends and Tactics in the Financial Services Industry. The report looked at the way firms use tools like blogs, communities and forums to engage consumers and provided dozens of recommendations to help financial institutions navigate this new terrain.

One of our findings from the Social Media report was that the mutual fund industry was more conservative about social media than any other segment Corporate Insight tracks. That includes annuity issuers, banks, brokerages and credit card issuers. At the time we published the report, none of the 20 or so fund firms we monitor had experimented with publicly visible blogs or communities, for instance, let alone actively used sites like Facebook and Twitter to reach out to consumers. Well, Vanguard’s recent forays in the space suggest that this situation may finally be changing.

As reported in the March 30, 2009 issue of e-Monitor (subscription required), Vanguard launched a public blog, available at www.vanguardblog.com, and has given it good visibility via links on the firm’s public and private website. To date, Vanguard has used the site to talk about the economy, investing, personal finance, retirement and other issues that should interest a broad range of consumers. Posts have been timely and interesting, and have so far avoided the temptation to unsubtly promote the firm’s products. Five Vanguard executives have contributed to the blog to date, which averages about two posts per week - a decent level of activity.

If the blog has a weakness, it’s that it allows comments but does not display them publicly. As the site explains, “(w)e welcome your feedback on this blog. Unfortunately, we’re not able to publish readers’ comments at this time. Rest assured that we’ll read and consider your feedback carefully.” It’s understandable that Vanguard would take a conservative approach to comments at this early stage of its entry into the social realm. Public comments require policing, after all. Still, to offer a comment box and not display comments may confuse some readers.

In addition to its blog, Vanguard recently launched a Facebook page, as reported in Ignites today (subscription required). The page offers a good mix of content, including video interviews with Vanguard employees around the theme of “Simple Truths” for effective saving. The page mixes education and marketing effectively and offers an online venue for people with an affinity for the firm to interact. We think Vanguard actually has one of the better corporate Facebook pages we’ve seen among financial services firms, some of which seem to be struggling with figuring out whether or how to use the site. To date, the firm has 851 friends - it will be interesting to see if that number continues to rise beyond this initial stage of publicity.

Overall, we think Vanguard proves that mutual fund firms can and should find modes of social networking that work for them. Staying on the sidelines of the social Web will make less and less sense as other financial institutions follow Vanguard into the ring.