Personal financial management system for creation of a client portfolio of investment and credit facilities where funds are distributed based on a preferred allocation

• US 5,864,828 A
• Filed: 08/27/1991
• Issued: 01/26/1999
• Est. Priority Date: 04/15/1987
• Status: Expired due to Fees

• Current Assignee: Home Account Network Incorporated
• Original Assignee: Proprietary Financial Products, Inc.
• Inventors: Atkins, Charles Agee
• Primary Examiner(s): Cosimano, Edward R.
• Assistant Examiner(s): BAINBRIDGE, BARTON L
• Application Number:
  US07/750,851
• Time in Patent Office: 2,709 Days
• Field of Search: 364/408, 705/35, 705/36, 705/37, 705/38, 705/39
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• 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
• CPC Class Codes: G07F 9/002 Vending machines being part of a centrally controlled network of vending machines

Abstract

A personal financial management program is for implementing, coordinating, supervising, analyzing and reporting upon investments in an array of asset accounts and credit facilities within a client account. Through a mathematical programming function the client specifies his financial objectives, his risk preference, forecast of economic and financial variables, and budgetary constraints. The mathematical programming function suggests to the client a portfolio of investment and credit facilities to best realize his financial objectives over a defined time horizon. In the preferred embodiment the central structural element of the financial account is a mortgage secured by the client'"'"'s home and one or more asset accounts. Client funds that would normally be used to amortize the mortgage may be alternatively used to increase the value of a designated asset account. The client account is imbalances if the client'"'"'s borrowing power is less than the minimum borrowing power specified by the financial institution. If the account is imbalanced, the client may reallocate the distribution of assets and liabilities within the client account and/or modify a set of constraints on the client account. If the client account is still not balanced after modification of the account, the system initiates a liquidation procedure.

Claims

1. A computer-based system for operating at least one client financial account comprising:

Processing means;

memory means connected to said processing means for storing information pertaining to the financial account(s);

means for storing in a database in said memory means information concerning each financial account, each financial account including at least one investment asset account having means for receiving funds for investment purposes and further having means for periodically updating an account balance and at least one liability account including a loan;

means for maintaining in said memory means records of funds received into the financial account wherein said funds comprise loan payments and additional cash flow;

input means for entering the client'"'"'s investment preferences;

means cooperating with said processing means for determining an initial preferred allocation of said received funds in accordance with said investment preferences to said investment asset account(s) and said liability account(s);

means cooperating with said Processing means for automatically determining an updated preferred allocation of said received funds in accordance with said investment preferences to said investment asset account(s) and said liability account(s) during the term of the loan; and

means cooperating with said processing means for allocating said received funds to pay interest on the loan and allocating any remaining portion of said received funds according to said updated preferred allocation of funds to said investment asset account(s) and said liability account(s) rather than amortizing the loan.

2. The system of claim 1 further comprising means for using said computer system to execute transaction orders on said investment asset account(s) and said liability account(s).

3. The system of claim 1 wherein said updated preferred allocation is determined when the account reaches a pre-determined threshold.

4. The system of claim 1 wherein said initial preferred allocation of funds to said investment asset account(s) and said liability account(s) is periodically updated.

5. The system of claim 1 wherein said initial preferred allocation of funds to said investment asset account(s) and said liability account(s) is continuously updated.

6. The system of claim 1 wherein said initial preferred allocation of funds to said investment asset account(s) and said liability account(s) is updated after every transaction order executed.

7. The system of claim 1 further comprising means for using said computer system to continuously monitor data from the account and update the initial preferred allocation after any change is made to the account.

8. The system of claim 1 wherein said initial preferred allocation of funds to said investment asset account(s) and said liability account(s) is updated after a client modifies his present or future goals.

9. The system of claim 1 further comprising means for generating computer reports of forecasted recommendations on the updated preferred allocation of funds to said investment asset account(s) and said liability account(s).

10. The system of claim 1 wherein the means cooperating with said processing means for allocating the received funds operates automatically.

11. The system of claim 1 further comprising a computerized financial optimization programming function to generate said allocations of funds to said investment asset account(s) and said liability account(s).

12. The system of claim 1 further comprising means cooperating with said processing means for optimally reallocating funds to said investment asset account(s) and said liability account(s) comprising:

means cooperating with said processing means for determining an optimum allocation of funds to said investment asset account(s) and said liability account(s) on said computer system;

means cooperating with said processing means for comparing said allocation of funds to said investment asset account(s) and said liability account(s) to said optimum allocation of said investment asset account(s) and said liability account(s); and

means cooperating with said processing means for reallocating funds to said investment asset account(s) and said liability account(s) based upon the determined optimum allocation.

13. The system of claim 1 wherein the means cooperating with said processing means for determining a preferred allocation of funds to said investment asset account(s) and said liability account(s) comprises:

means cooperating with said processing means for performing a client risk preference/aversion analysis;

means cooperating with said processing means for determining account constraints;

means cooperating with said processing means for forecasting values for future economic and account variables; and

a computerized financial optimization function cooperating with said processing means to generate an allocation of funds to said investment asset account(s) and said liability account(s) based on said client risk analysis, account constraints and forecasted economic and account variables.

14. The system of claim 13 further comprising:

means for using said computer system to modify the determined allocation of funds to said investment asset account(s) and said liability account(s) according to client input; and

means for regenerating an allocation of funds to said investment asset account(s) and said liability account(s) based on said client risk analysis, account constraints, forecasted economic and account variables and said client input.

15. The system of claim 1 wherein said initial and updated preferred allocation of funds to said investment asset account(s) and said liability account(s) is based at least partially on client input.

16. The system of claim 15 wherein said client input comprises client approval of an updated allocation.

17. The system of claim 15 wherein said client input comprises client rejection of said updated allocation and subsequent client changes to said updated preferred allocation of funds to said investment asset account(s) and said liability account(s).

18. A computer-based system for operating at least one client financial account comprising:

a central processing means;

memory means connected to said processing means for the storage of information pertaining to the financial account(s);

means for storing in a database in said memory means information concerning each financial account, each said financial account comprising at least one investment asset account having means for receiving funds for investment purposes and further having means to periodically update an account balance and at least one liability account including a loan, said loan being secured with a lien on at least one residence and one or more of said investment asset account(s);

means for maintaining on said computer records of funds received into the financial account wherein said funds comprise loan payments and additional cash flow;

input means for entering the client'"'"'s investment preferences;

means cooperating with said central processing means for determining an initial preferred allocation of said received funds in accordance with said investment preferences to said investment asset account(s) and said liability account(s) according to information stored in said memory means;

means for automatically updating said determination of the initial preferred allocation of said received funds in accordance with said investment preferences to said investment asset account(s) and said liability account(s) during the term of the loan; and

means cooperating with said central processing means for allocating said received funds to pay interest on the loan and utilizing any remaining portion of said funds according to said preferred allocation of said funds to said investment asset account(s) and said liability account(s) rather than amortizing the loan.

19. The system of claim 18 wherein said allocating means operates automatically.

20. The system of claim 18 further comprising terminal means connected to said central processing means.

21. The system of claim 20 wherein said terminal means comprise branch office terminals, account manager terminals, account supervisor terminals, or client terminals.