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Technology has narrowed the gap l Insightful Investing


Last updated 1/23/2019 at Noon

I just returned from a trip to Europe. I flew coach. I had extra legroom, but an extremely small table.

It was so small I was not able to put my laptop on it. I ended up watching five movies on a tiny screen about the size of a ham sandwich, and I arrived at my destination at exactly the same time the people in first class did. Their seats reclined into little beds. They were well rested and I was, let’s say a bit sleepy.

If I were to book the flight today, my ticket one way would be $556 and the first class ticket is $5,027. The first class ticket would give me access to a bed, fine wine and entry into the British Airways lounge.

Nice perks I would say, but worth the extra $4,471?

How does this relate to my investment advisory business? Over the past 30 years the gap between how large investors and let us say “less than large investors” are treated, and to a large degree, this gap has been closed by technology and the now deceased Jack Bogle of Vanguard. He was the main force behind the invention of index funds. Their main attribute is a low cost, well-diversified way of having money invested in the financial markets. And the investor could go directly to the market without a broker or financial advisor.

Jack Bogle single-handily changed the way financial services are offered. There were others, but his view to keep cutting the internal costs of his financial products drove his competitors to change the way they did business. And as a full service professional, I personally had to adapt and change the way I did business too.

During the 2002 market storm, my business was structured to call every client for every trade. This was a tedious and somewhat inefficient way of doing business. Sometimes it would take us weeks to call every client, answer their questions and then place the trades. Today, through the use of good technology, I can make an investment decision and have every account changed within a few minutes. The size of the account doesn’t matter. In my vernacular, every client has a first class seat.

Back to my trip to Europe. While I was traveling, the financial markets were let's say, bumpier than I prefer. I had decided to rearrange things while I was watching the first class flyers sleep. I was eating a ham sandwich and watching a ham sandwich sized screen. I landed in Zurich, grabbed a latte from Starbucks, connected to the internet and in 20 minutes repositioned my client portfolios.

This was possible because of technology and my basic company philosophy of being nimble enough to make changes in this increasingly small, highly complex world.

Who knows if the decisions to make the changes were the right ones? That is not the point. Knowing that it can be done and executed flawlessly is the point.

Up until recently this type of ability was only available to the institutional investor. And here I sit, JG Moormeier Financial, conducting business 8,000 miles away, in a Seattle-based coffee shop in the Zurich airport. What will the next 30 years look like? Who knows, but I am looking forward to the ride.

Why is this insightful investing? It is insightful investing because they way we conduct business and live our lives has changed forever. We are more connected than ever before. And we can do so much with less effort than ever before. It is sort of like plowing the soil with a horse and blade versus plowing with a tractor.

I believe being nimble is a good idea. Technology has narrowed the gap for the first class and coach investor. And the role of the advisor still means giving good advice. Technology does not offer advice, so make sure you get good advice.

That’s my opinion.

Jeffrey Moormeier of JG Moormeier Financial is a Mukilteo-based financial advisor affiliated with KMS Financial Services, Inc. an SEC registered investment adviser. His column does not represent the opinions of KMS, nor is it an official prediction or recommendation of any kind. The opinions expressed in this column are generalizations. For advise catered to your specific financial circumstances, contact Jeff directly at or 425-931-8898.


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