Joel Bruckenstein throws out several predictions for 2008 in a series of articles on Morningstar Advisor called Technology for 2008: Part One, and Part Two. Joel tracks the wealth management industry and reports mainly on technology.

Article highlights include:

• Document Management (yawn)
• Document Authentication (yawn)
• Online Statements (interesting)
• Integration (interesting)
• Rebalancing Software (interesting)
• Retirement Income Planning Software (yawn)
• Vista Takes Off (inevitable)
• Office 2007 Will Become The Industry Standard (inevitable)
• Smaller Advisors Will Embrace Apple (interesting)
• Technology Vendors Will Emphasize ROI (zzz…)

Online statements was his first interesting prediction. He says “2008 is likely to be remembered as the beginning of the end for paper client quarterly statements,” and I think I agree with him. With my online accounts, it’s becoming increasingly difficult to receive written statements (I like to have them for my files). I think advisors should go the same route and stop killing all those trees.

Bruckenstein talks about LightPort, AdvisorSquare and Advisor Products, calling Advisor Products “by far the most ambitious version,” and talks about their “highly customizable personal lockboxes.” Andy Gluck, president of Advisor Products showed me some of the things they were working on when I interviewed him for my Kickstarting Advisor Blogs post last month. In particular he was excited about a Client ToDo system they were working on, where advisors could push client tasks out to the web site where (one would hope) the clients would complete the tasks and check them off of the advisor’s list. Very slick stuff.

Office 2007 and Vista will take off this year, not because they’re significantly better than other software, but just from the sheer inevitability of Microsoft’s continuing market dominance. When you buy a new computer, they come pre-installed so–as more and more firms get a taste of them–they will gradually take over the infrastructure of wealth management firms.

I disagree that advisors will embrace Apple. You either (1) have to have a completely outsourced Internet technology solution or (2) be tech savvy enough to buy a Windows license and run all your non-Apple software in a 3rd party Windows emulator. I don’t see more than a few advisors meeting those two requirements. (Although the new MacBook Air does make a compelling argument for giving it a shot…)

I agree that adoption of Rebalancing Software will continue growing over the next year. The popularity and success of companies like iRebal have been a bit of a mystery to me. The software frankly isn’t that hard to write and shouldn’t cost anywhere near as much as companies like iRebal charge. A portfolio management system is an order of magnitude more complicated to create and–right now–rebalancing systems are being sold for significantly more money than their PMS counterparts. Something doesn’t ping right with that business model and I’d watch for both the entrance of new rebalancing startups and a reduction in the overall price of the technology.

I’m talking to the Your Silver Bullet guys and should do a post soon. As I’ve mentioned before, their concept isn’t exactly what I thought it was. They did get Schwab to sign up, which bodes well for the future.

I’ll add one to the list that Joel didn’t–Microsoft Silverlight. In mid-2008 Silverlight 2.0 will be released and it may just change the face of the Internet. Developers are eagerly awaiting the 2.0 release, which carries Microsoft’s powerful .NET framework into the Internet browser and lets developers easily build desktop applications for the web. We won’t see widespread rollout for wealth managers but we will see the start of an avalanche of buzz in more general development/web media channels.

All in all, this is an interesting article from one of our industry’s leading technology pundits. Well worth the read.