System and method for automating investment planning

• US 20070083455A1
• Filed: 12/11/2006
• Published: 04/12/2007
• Est. Priority Date: 06/09/1999
• Status: Active Grant

• Current Assignee: Jeanne Gill, Ralph Wileczek, Steven Bove
• Original Assignee: Jeanne Gill, Ralph Wileczek, Steven Bove
• Inventors: Gill, Jeanne, Bove, Steven, Wileczek, Ralph
• Granted Patent: US 7,552,079 B2
• Time in Patent Office: Days
• US Class Current: 705/36.T
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

A computerized scheme automates investment planning for a client. In the scheme, data regarding the client'"'"'s desired asset allocation, current asset portfolio and preferred domain are input into a processor. This data are used to automatically generate financial transaction recommendations for modifying the client'"'"'s current asset portfolio to reach as close as possible to the desired asset allocation and the preferred domain. The recommendations include specific recommendations for selling amounts of selected current assets and specific recommendations for buying amounts of one or more investment funds. The recommendations are displayed on a summary report for review by the client or the client'"'"'s financial manager, or the recommendations are electronically communicated to a trade execution computer which automatically performs the necessary transactions to execute the buy/sell recommendations. The recommendations are selected in a manner which minimizes the tax impacts and transaction costs of potential sell transactions.

Claims

1. An article of manufacture for automating investment planning for a client, the article of manufacture comprising a computer-readable medium holding computer-executable instructions for performing a method comprising:

(a) inputting into a computer data regarding the client'"'"'s current asset portfolio, including the taxable status of each asset;

(b) inputting into a computer data regarding the client'"'"'s desired asset allocation;

(c) inputting into a computer data regarding the client'"'"'s preferred domain;

(d) using the data in steps (a)-(c) to automatically generate financial transaction recommendations for modifying the client'"'"'s current asset portfolio to reach as close as possible to the desired asset allocation and the preferred domain, the recommendations including specific recommendations for selling amounts of selected current assets and specific recommendations for buying amounts of one or more investment funds; and

(e) displaying the recommendations on a summary report for review by the client or the client'"'"'s financial manager.

2. The article of manufacture of claim 1 wherein step (d) includes determining tax impacts of potential sell transactions, the recommendations being selected to minimize the tax impacts.

3. The article of manufacture of claim 2 wherein the summary report includes the tax impacts of at least some of the recommendations.

4. The article of manufacture of claim 2 wherein the computer-executable instructions perform a method further comprising:

(f) inputting into a computer data regarding the client'"'"'s asset portfolio preferences, including current assets that the client wishes to hold or sell, and constraints on asset selling, wherein step (d) further includes using the data in step (f) to automatically generate the financial transaction recommendations.

5. The article of manufacture of claim 1 wherein step (d) includes determining transaction costs of potential sell transactions, the recommendations being selected to minimize the transaction costs.

6. The article of manufacture of claim 5 wherein the summary report includes the transaction costs of at least some of the recommendations.

7. The article of manufacture of claim 1 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and step (d) includes a recommendation to hold the client'"'"'s conditionally repositionable assets if the client'"'"'s new asset allocation will be within a predetermined percentage of the desired asset allocation after selling all of the client'"'"'s repositionable assets.

8. The article of manufacture of claim 7 wherein the predetermined percentage is 3%.

9. The article of manufacture of claim 1 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and step (d) includes treating the conditionally repositionable assets as non-repositionable assets when making the current asset portfolio modifications.

10. The article of manufacture of claim 1 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and step (d) includes a recommendation to sell the client'"'"'s repositionable assets until the tax cost of selling equals a predetermined percentage of the client'"'"'s current asset portfolio.

11. The article of manufacture of claim 1 wherein the recommendations include recommendations to (i) add specific amounts of shares to currently held mutual funds, and (ii) open one or more new mutual funds and contribute specific amounts of shares to the new funds.

12. The article of manufacture of claim 1 wherein the desired asset allocation is determined based upon the client'"'"'s Ibbotson score.

13. The article of manufacture of claim 1 wherein step (d) includes developing target portfolio amounts and adjusted target portfolio amounts for each asset category in the desired asset allocation.

14. The article of manufacture of claim 1 wherein the computer-executable instructions perform a method further comprising:

(f) inputting information regarding the client which is necessary to determine the client'"'"'s desired asset allocation and the client'"'"'s preferred domain; and

(g) automatically determining the client'"'"'s desired asset allocation and the client'"'"'s preferred domain and using the results as the data inputs in steps (b) and (c).

15. An apparatus for automating and executing investment planning for a client comprising:

(a) a processor that receives data regarding;

(i) the client'"'"'s current asset portfolio, including the taxable status of each asset,

(ii) the client'"'"'s desired asset allocation, and

(iii) the client'"'"'s preferred domain,

the processor using the data to automatically generate financial transaction recommendations for modifying the client'"'"'s current asset portfolio to reach as close as possible to the desired asset allocation and the preferred domain, the recommendations including specific recommendations for selling amounts of selected current assets and specific recommendations for buying amounts of one or more investment funds; and

(b) a trade execution computer that sells amounts of selected current assets or buys amounts of one or more investment funds in accordance with the specific recommendations.

16. The apparatus of claim 15 wherein the processor further determines tax impacts of potential sell transactions, the recommendations being selected to minimize the tax impacts.

17. The apparatus of claim 16 wherein the processor further receives data regarding:

(iv) the client'"'"'s asset portfolio preferences, including current assets that the client wishes to hold or sell, and constraints on asset selling, and the processor further uses the client'"'"'s asset portfolio preferences to automatically generate the financial transaction recommendations.

18. The apparatus of claim 15 wherein the processor further determines transaction costs of potential sell transactions, the recommendations being selected to minimize the transaction costs.

19. The apparatus of claim 15 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and the processor generating a recommendation to hold the client'"'"'s conditionally repositionable assets if the client'"'"'s new asset allocation will be within a predetermined percentage of the desired asset allocation after selling all of the client'"'"'s repositionable assets.

20. The apparatus of claim 19 wherein the predetermined percentage is 3%.

21. The apparatus of claim 15 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and the processor treats the conditionally repositionable assets as non-repositionable assets when making the current asset portfolio modifications.

22. The apparatus of claim 15 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and the processor generates a recommendation to sell the client'"'"'s repositionable assets until the tax cost of selling equals a predetermined percentage of the client'"'"'s current asset portfolio.

23. The apparatus of claim 15 wherein the recommendations include recommendations to (i) add specific amounts of shares to currently held mutual funds, and (ii) open one or more new mutual funds and contribute specific amounts of shares to the new funds.

24. The apparatus of claim 15 wherein the desired asset allocation is determined based upon the client'"'"'s Ibbotson score.

25. The apparatus of claim 15 wherein the processor further generates target portfolio amounts and adjusted target portfolio amounts for each asset category in the desired asset allocation.

26. The apparatus of claim 15 further comprising:

(c) an input data processor that

(i) receives information regarding the client which is necessary to determine the client'"'"'s desired asset allocation and the client'"'"'s preferred domain, and

(ii) determines and outputs the client'"'"'s desired asset allocation and the client'"'"'s preferred domain,

wherein the outputted desired asset allocation and preferred domain are inputted into the processor.