Better Computer Models Enhance Financial Planning Web Sites

Funny thing about the Web. What was revolutionary two years ago is practically commonplace today.

Back in 1998 when Nobel Prize winning economist William Sharpe went online with FinancialEngines.com, the site seemed nothing short of awesome. For the first time, average investors had direct access to sophisticated computer-modeling software that could custom-design their retirement portfolios. All you had to do was follow the program's recommendations as to which mutual funds to include in your 401(k) plan or IRA, then contribute the prescribed amount from your paycheck each month. And if you were diligent about saving, time-tested laws of modern portfolio theory and mathematical odds usually showed you had a decent chance of a comfortable retirement. What could be simpler?

Now, just two years later, financial planning tools similar to those used at FinancialEngines.com can be found all over the Web. Among them: Morningstar's ClearFuture, Financial Plan Auditors and Quicken.com's 401k Advisor. I wrote about these in a column last March. ...