More financial institutions are adopting Web 2.0 according to this article by Melanie Rodier.  Web 2.0 is the catchall phrase for the new way to build web sites, which includes both using responsive Ajax java tech for the HTML and incorporating a community collaboration philosophy into the web site design.  If you aren’t up to speed on Web 2.0 you can read a primer I wrote here.

As I allude to in my What is web 2.0? post, the meaning of Web 2.0 varies depending on who uses it.  In the context of this article, it’s about collaboration and information delivery–building a community of like minded individuals to share ideas (trading strategies) and news.

I find it interesting that these concepts are now hitting mainstream.  Those of us that have been using the Internet for a long time have had collaboration.  In it’s early ARPANET days (before spam and porn took over), the Internet was almost exclusively a collaboration tool. You used interactive newsgroups, posting questions and answers to people with similar interests, or having real time chats over IRC with people all over the world.  It was originally all about collaboration.

Before I wax overly long on the misc.invest.* hierarchy, I want to get back to the topic at hand.  Tying this article in with Matt’s post “Kickstarting Advisor Blogs” made me realize just how important all of this is to the investment advisor.

Ultimately, says David Schehr, research director at Gartner and author of a report on the use of Web 2.0 by brokerages, traditional investment firms and brokerages no longer have a choice — they must embrace Web 2.0 or risk losing out to competitors, particularly a new generation of Internet brokers.

If you don’t have some form of Blog or collaboration tool for your clients and yourself in the next 5 years you’ll be well on your way to becoming obsolete. Okay, so that may seem a bit dramatic but I think it’s true.  The boomers are starting to *ahem* exit the picture and now it’s my generation that is picking up the baton.

My generation is the video game technology junkie generation, we not only know how to set the clock on the DVD player, we know to shop for a DVD player that we can plug into the Internet so it can set it’s own damn clock. We have a short attention span, expect high tech solutions and rapid response from anyone who provides us with services.

For example, I pay a bit of a premium when shopping for computer parts,  I go to CompUSA.  Why?  Because they can tell me what store near me has the parts I want in stock.  I put my order together online and pay for it, then drive to the store and pick it up.  No lines to wait in and I don’t even have to wait for the brown van to show up.

My point is this, if I think of a question at 2am I don’t want to make an appointment to discuss this with my advisor.  I want a response now.  If my advisor had a good blog with frequent updates I would read it.  Check my market values and probably use a forum to chat with other clients of the same advisor.

I don’t have a physical check-book anymore.  I don’t balance a checkbook because my bank does it.  I get my balance as of the last electronic transaction (which all of my transactions are).  All I have to do is audit the transactions.

I will grant you that I am at the bleeding edge even for my generation, but more of your clients are going to be like me.  In ten years it will be the generation behind me and they leverage technology even more–you may end up doing a large portion of your client support over instant messenger, or cell text. Many of that generation have nothing but electronic relationships.

Here is where I think this is going for advisors. You need to have a blog to share thoughts and ideas with your clients. You need to have electronic account information and account requests (send me 10k, show me my performance etc).. and you will need to have some form of discussion forums where your clients can collaborate.  All of these things are how you establish electronic touch points with your clients.

You are going to have to make this leap in the next five years or I think you will begin to be left behind. If you don’t do it now, your broker dealer or custodian will eventually provide you with the tools.  But do you really want your clients to form their electronic relationship with your broker dealer instead of you?