Recently, I had the Web 2.0 conversation with a friend. I think by now everyone with technology feelers has heard this term: Web 2.0. I’ve heard: “Web 2.0 is coming”, “this would be good on Web 2.0″, etc… etc… But what is Web 2.0? I don’t see any Microsoft Web 2.0 development platforms and I don’t see any Web 2.0 Linux tools or Java tools.

If you look at Wikipedia you’ll see it’s a term that was coined to represent the changes in the web that had already begun taken place. It’s about the web moving from a geek research and sharing library to a place where people exchange ideas and communicate with each other. In other words, its about Wiki’s, Weblogs, Podcasts and Web Services. This blog is a part of Web 2.0.

Largely, it’s an overused marketing term. Much like “synergy” or similar terms it has been abused to the extent that it really has no solid meaning anymore. As a geek, I think it means software as a service. Getting and sharing data between businesses simply and efficiently is the next logical step for the web.

I think everyone has figured out that the web as a store front has very little success. It can be used to augment sales but to create a web-only store front is a very daunting task. When I want a new computer part I will go online to CompUSA or Micro Center and find the part I want, compare prices and go to the store. Like everything there are exceptions, Amazon, Netflix etc… but these are the exceptions not the rule.

Would I hire my financial planner through a website? how about a lawyer? or a doctor? Heck no, but I would expect that my professionals have informative websites. I would much prefer to go to a website to get my account balance than to call.

For our industry, it’s expected that financial planning firms have a website. I don’t think the clients are at the point where they’re *demanding* online access from us. But, that time is coming. As my parents’ generation fades and my more technologically savvy generation ages, we’re going to be demanding it.

If you aren’t already moving in this direction, you need to be. It’s a tricky proposition, having run development at a few different outsourcing firms, I can tell you it’s difficult. You need the data into the system and reconciled before clients can see it. Many shops that I’ve worked with don’t have the resources to support it.

Usually, unless someone is coming in for a meeting, their data is not fully reconciled until the end of the quarter. The last thing you want is your client asking why their account balance is off by some amount and asking how you can possibly be managing their money with the data so far off.

Obviously, your data gets this way due to lack of resources. You’d have to hire another body to ensure the data stayed accurate. This is where software as a service comes in. We really need our custodians to provide help for this. We should be able to connect to them in real-time through software and compare our system to their system. If there is a difference our system can post the missing or incorrect transactions and auto-reconcile the data.

In my dream world, you don’t ever run an import. Every hour or so an automated job would kick off and reconcile our data for us. Adding new transactions, posting corrections and keeping our database up to date. It shouldn’t be that hard for custodians to provide this service. They already have the data — it’s the system of record so it’s always reconciled.

What’s needed is for our community to start pushing custodians to provide this. As a community we need to come together to start to pressure the Custodians to start working for us, not the other way around. As I said before it’s not in their best short term interest to make it easy for the advisor to be mobile, but it *is* in their best long-term interest.

We need to start pushing them into providing us with “Web 2.0″ services. Making it clear that we don’t want them to provide services for our clients, that’s our job. We want them to provide services to us. If they can’t do that then maybe we should find a Custodian that will.