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Derech Agav: That some people think its a matter of tznius is irrelvent, even if you are that person. What matters is what the person you are talking to believes. What to one person is overly formal and stuffy, is to another person a sign of basic respect. Given the surnames are a goyish invention, and for Ashkenazim a very recent one (we only switched to inherited surnames about 200 years ago – less in eastern Europe), there is clearly no halachaic issue. What matters is trying to figure out what the other person expects and that requires developing appropriate social skills (e.g. African Americans get highly insulted to be called by forename unless you know them very well, most secular Israeli regard you as stuffy and unfriendly if you use a surname, etc., etc.).