It was 1997. Florida beat Cleveland in the World Series, Harry Potter was not yet a household name and Y2K was barely a gleam in programmers' eyes. That was also the year my firm, Corporate Insight, began tracking the online brokerage world with the e-Monitor service.

A look back at some of the old reports shows just how far the industry has come in 10 years. Not only has the roster of players changed, but the online capabilities have mushroomed into websites that are true trading and investing workstations and customer service channels.

In 1997, the industry as a whole was just getting its feet wet in creating a presence online, where customers could go 24 hours a day to check their account balance and place a stock or mutual fund trade. In the rush to keep up with the competition and demonstrate their cutting-edge technology, many firms unveiled retail brokerage sites that were burdened by garish color combinations, awkward adjustable frames and confusing navigation. Streaming quotes were nonexistent in the retail market, and, more importantly, few if any firms gave customers access to comprehensive real-time account and market information that could influence their decision about whether or not to make a trade.

In the past 10 years, retail financial services firms have come a long way in improving the customer experience and have made some critical improvements to their websites, specifically around the aspects of design and functionality. Some examples:

* Real-time information access. The average retail brokerage site now provides unlimited, real-time quotes and account balances, history and position information to all clients. As a result, customers now have a clearer view of the market and of their own financial accounts than ever before.

* Expanded product portfolios. Not long ago, most brokerage firms offered stock and mutual fund trading and little else. Now many product menus are much more diverse and include equity, exchange-traded fund, fixed-income mutual fund and options trading. Online foreign equities trading is now set for release at one major brokerage's website. Beyond trading, brokerages have embraced cash management capabilities normally associated with banks, including free online bill payments and electronic funds transfers, both internal and external.

* Streaming quotes. Today, several major brokerage firms offer free, streaming real-time quotes to all of their retail brokerage customers. For active or higher-balance clients, several firms provide streaming charts, news and Level II quote data, along with market screening and trading tools that would have once been viewed as appropriate for institutional trading desks.

* Better-designed websites. Design standards have emerged for the industry and for e-commerce in general, producing sites that are easier to read and navigate and more user-friendly.

Although the securities industry has clearly made significant progress, by no means have we reached the stage where firms can rest on their laurels, having "cracked the code" for the design and functionality of these sites. Some problems continue to plague them:

* Account integration. Firms that offer brokerage, banking and other financial services to retail clients continue to struggle with the problem of creating a single, seamless experience for both bank and brokerage account information and services. Many firms treat these products as separate silos, taking a clear toll on the online experience.

* Planning tools. Few firms have even attempted to offer valuable financial planning tools or advice online. The best retail advice platform we tested in the past decade-JPMorgan's Morgan Online service-was eventually brought in-house for use by the firm's private bankers. Most brokerage firms seem content to offer clients some basic financial calculators without connecting the results to any clear recommendations or next steps.

* Navigation and design. In the early days, navigation and design oddities were forgivable; designers were making things up as they went along. These days, there are fewer excuses for such simple problems as a broken hyperlink or inconsistencies in page layout or aesthetics. If a public home page can't express a firm's unique differentiating factors at a cursory glance, then that page probably needs to be redesigned. Looking to the future, easy text-size control, smarter icon design and comfortable color combinations will be important as the user community ages.

* Customizability. It's surprising how little customizability firms provide to their clients. The firm that masters this issue may be the one to beat in the next decade, at least as far as online service goes.

Michael Ellison is executive vice president of Corporate Insight. This article originally appeared in Securities Industry News.

(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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