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Looking Back: 10 Years of Advisor Technology

Things have changed a lot in the past 10 years, but there's more change in store for advisors.

Joel P. Bruckenstein, 04/08/2010

Past, Present and Future
This column marks somewhat of a bittersweet milestone for me: After roughly ten years, this will be my last regularly scheduled monthly Morningstar Advisor column. On the one hand, this is a difficult post for me to leave because I think very highly of the folks I've had the pleasure to work with here over the years. While I'm sad to leave this column behind, doing so does free up some time for me to pursue some new opportunities.

A Look Back
It does not seem so long ago to me that I started writing this column, but things were much different in 2000 than they are today. The Dow Jones Industrials peaked in January of that year, followed by the NASDAQ peaking in March. This set the stage for the bursting of the tech bubble. In 2000, the average cost of a new house was $134,150. The cost of a gallon of gas was $1.26. A first-class postage stamp cost $0.33.

In the realm of technology, the world gave a collective sigh of relief as Y2K passed without any serious computer failures despite the many warnings to the contrary. On May 4, 2000, however, the ILOVEYOU virus spread over the Internet in a matter of hours, shutting down servers and corporate e-mail systems, as well as corrupting files and settings on personal PCs. AOL merger with Time Warner.

In February 2000, Apple released the second iteration of its iBook, featuring 64 MB of RAM, a 300MHz G3 processor, and a 6GB hard drive for $1,599. The black "special edition" with a 366 MHz processor sold for $1,799.

In 2000, virtually all advisors got their mutual fund data from either the print editions of Morningstar reports (how quaint) or Principia disks. Most financial-planning software used deterministic models to create financial plans. Few advisors understood the applicability of Monte Carlo simulations in financial planning and even fewer actually employed it in their practices. In September of 2000 I reviewed a program called AASim that was a pioneering MCS tool for advisors.

In 2000, many of our clients actually had employee stock options that were in the money, and I devoted one of my early columns to a product called StockOpter that helped advisors help their clients compare various stock option strategies.

Yet another early review in that latter half of 2000 covered Junxure, a CRM application that was just beginning to gain acceptance within the advisor community.

Today
Fast forward 10 years, and we're still dealing with some extreme gyrations in the financial markets. Housing prices, though much higher than 2000, are off as much as 50% from their peaks in some parts of the country. As one would expect, everything from gas to postage stamps costs more today than it did back then.

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