User interface for a financial advisory system

• US 5,918,217 A
• Filed: 12/10/1997
• Issued: 06/29/1999
• Est. Priority Date: 12/10/1997
• Status: Expired due to Term

• Current Assignee: Financial Engines, LLC.
• Original Assignee: Financial Engines Incorporated (Edelman Financial Engines LLC)
• Inventors: Jones, Christopher L., Sharpe, William F., Maggioncalda, Jeff N., Tauber, Ellen, Fine, Ken
• Primary Examiner(s): Peeso, Thomas R.
• Application Number:
  US08/988,226
• Time in Patent Office: 566 Days
• Field of Search: 705/4, 705/35, 705/36, 705/38
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A user interface for a financial advisory system is provided. According to one aspect of the present invention, a user may interactively explore how changes in one or more input decisions such as a risk tolerance, a savings level, and a retirement age affect one or more output values such as a probability of achieving a financial goal or an indication of short-term risk. A first and second visual indication are concurrently displayed. The first visual indication includes input mechanisms, such as slider bars, for receiving the input decisions. The second visual indication includes a set of output values that are based upon the input decisions and a recommended set of financial products. After updated values for the input decisions are received via the input mechanisms, a new recommended set of financial products and a new set of output values may be determined based upon the updated values. The second visual indication may then be updated to reflect the new set of output values. According to another aspect of the present invention, a graphical input mechanism for receiving a desired level of investment risk may be calibrated. A set of available financial products, such as a set of mutual funds, and a predefined volatility, such as the volatility of the Market Portfolio are received. The settings associated with the graphical input mechanism are constrained based upon the set of available financial products. Additionally, the calibration of the units of the graphical input mechanism may be expressed as a relationship between the volatility associated with a setting of the graphical input mechanism and the predefined volatility.

Claims

1. In a financial analysis system, a method of allowing a user to interactively explore how changes in one or more input decisions affect one or more output values, the method comprising the steps of:

concurrently displaying

a first visual indication depicting input mechanism for receiving one or more input decisions, and

a second visual indication depicting a set of output values, the set of output values based upon the one or more input decisions and a recommended set of financial products;

receiving updated values for the one or more input decisions via one or more depicted input mechanisms;

determining a new recommended set of financial products and a new set of output values based upon the updated values;

updating the second visual indication to reflect the new set of output values; and

displaying a third visual indication depicting the recommended set of financial products, the recommended set of financial products conditional on the one or more input decisions.

2. The method of claim 1, wherein the first, second, and third visual indications are displayed concurrently.

3. The method of claim 2, wherein the set of output values are grouped together in a first predefined portion of a display, the recommended set of financial products are grouped together in a second predefined portion of the display, and the input mechanisms are grouped together in a third predefined portion of the display.

4. The method of claim 1, wherein the set of output values are grouped together in a first predefined portion of a display and the recommended set of financial products are grouped together in a second predefined portion of the display.

5. The method of claim 1, wherein the input decisions include a level of investment risk.

6. The method of claim 5, wherein the input decisions include a measure of saving.

7. The method of claim 5, wherein the input decisions include a time horizon.

8. The method of claim 7, wherein one or more of the input mechanisms are slider bars.

9. The method of claim 7, wherein one or more of the input mechanisms are text entry fields.

10. The method of claim 1, wherein the output values include a probability of achieving a financial goal at a particular time horizon.

11. The method of claim 10, wherein the output values include a long-term financial risk associated with the one or more input decisions.

12. The method of claim 10, wherein the output values include a short-term financial risk associated with the one or more input decisions.

13. The method of claim 1, wherein the recommended set of financial products include one or more mutual funds.

14. In a financial analysis system, a method of allowing a user to interactively explore how changes in one or more input decisions affect one or more output values, the method comprising the steps of:

concurrently displaying

a first visual indication depicting input mechanisms for receiving one or more input decisions, and

a second visual indication depicting a set of output values, the set of output values based upon the one or more input decisions and a recommended set of financial products;

receiving updated values for the one or more input decisions via one or more depicted input mechanisms;

determining a new recommended set of financial products and a new set of output values based upon the updated values;

updating the second visual indication to reflect the new set of output values; and

wherein the set of output values include a probability of achieving a financial goal.

15. In a financial analysis system, a method of allowing a user to interactively explore how changes in one or more input decisions affect one or more output values, the method comprising the steps of:

concurrently displaying

a first visual indication depicting input mechanism for receiving one or more input decisions, and

a second visual indication depicting a set of output values, the set of output values based upon the one or more input decisions and a recommended set of financial products;

receiving updated values for the one or more input decisions via one or more depicted input mechanisms;

determining a new recommended set of financial products and a new set of output values based upon the updated values;

updating the second visual indication to reflect the new set of output values; and

wherein the one or more input decisions include a level of risk and a level of saving.

16. In a financial analysis system, a method of calibrating a graphical input mechanism, the graphical input mechanism allowing a user to specify a desired level of investment risk, the method comprising the steps of:

receiving a set of available financial products;

constraining settings associated with the graphical input mechanism based upon the set of available financial products;

receiving a predefined volatility; and

forming a relationship between a setting of the graphical input mechanism and the predefined volatility.

17. The method of claim 16, wherein each financial product in the set of available financial products is associated with a volatility, the step of constraining settings associated with the graphical input mechanism further includes the step of constraining settings to lie between a lowest volatility setting and a highest volatility setting, the lowest volatility setting being associated with the volatility of a lowest-volatility financial product in the set of available financial products and the highest volatility setting being associated with the volatility of a highest-volatility financial product in the set of available financial products.

18. The method of claim 16, wherein each setting of the graphical input mechanism is associated with a volatility, and wherein each volatility is associated with a subset of the available set of financial products.

19. The method of claim 18, wherein the graphical input mechanism comprises a risk slider bar.

20. The method of claim 19, wherein the risk slider bar has a midpoint setting, and the volatility associated with the midpoint setting is defined relative to the predefined volatility.

21. The method of claim 20, wherein the predefined volatility is defined relative to the volatility associated with the Market Portfolio.

22. The method of claim 20, wherein each setting of the graphical input mechanism is associated with a unit, and wherein the unit is expressed in terms of the relationship between the volatility associated with the setting and the predefined volatility.

23. The method of claim 16, wherein the graphical input mechanism comprises a risk slider bar.

24. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based upon the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal; and

e. wherein each of a plurality of probability values is associated with a corresponding icon, and wherein the step of providing a visual indication to the user of the probability of achieving the financial goal further includes the step of displaying the icon corresponding to the probability of achieving the financial goal.

25. The method of claim 24, wherein the plurality of icons comprises weather forecast icons incorporating various combinations of clouds, sun, and sky.

26. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based on the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal; and

e. wherein the financial goal is associated with a particular time horizon.

27. The method of claim 26, wherein the step of receiving one or more inputs upon which a probability distribution id dependent includes receiving a level of investment risk.

28. The method of claim 27, wherein the step of receiving one or more inputs upon which a probability distribution id dependent includes receiving a savings rate.

29. The method of claim 28, wherein the financial goal is a retirement income goal.

30. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based upon the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal; and

e. wherein the probability distribution is generated by a simulator.

31. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based upon the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal; and

e. wherein the probability distribution is obtained by retrieving values from a lookup table.

32. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based upon the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal; and

e. wherein the probability distribution is generated by an analytic approximation of a distribution of simulated values.

33. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based upon the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal; and

e. wherein the financial goal comprises a retirement standard of living goal.

34. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based upon the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal; and

e. wherein the one or more inputs include one or more of a level of risk and a level of savings.

35. A method of providing an indication to a user of a probability of achieving a financial goal, the method comprising the steps of:

a. receiving a financial goal from the user;

b. receiving one or more inputs upon which a probability distribution is dependent, the probability distribution representing a set of possible future portfolio values based upon the one or more inputs;

c. determining the probability of achieving the financial goal by evaluating the cumulative probability distribution that meets or exceeds the financial goal;

d. responsive to the determining step, providing a visual indication to the user of the probability of achieving the financial goal, wherein the visual indication of the probability of achieving the financial goal is updated in real-time;

e. detecting the engagement of an input device; and

f. while the input device is engaged, repeating steps b, c, and d.

36. In a financial analysis system, a method of presenting various aspects of financial risk to a user in order to help the user deal with and control the financial risk, the method comprising the steps of:

receiving a financial goal from the user;

receiving one or more inputs including decision variables upon which a probability distribution is dependent, the probability distribution representing probabilities over time of the user having a certain amount of wealth;

displaying a first visual representation which illustrates a short-term financial risk associated with the one or more decision variables;

displaying a second visual representation which illustrates a risk of not achieving the financial goal based upon the probability distribution; and

displaying a third visual representation which illustrates a long-term financial risk associated with the one or more decision variables.

37. In a financial analysis system, a method of presenting various aspects of financial risk to a user in order to help the user deal with and control the financial risk, the method comprising the steps of:

receiving a financial goal from the user;

receiving one or more inputs including decision variables upon which a probability distribution is dependent, the probability distribution representing probabilities over time of the user having a certain amount of wealth;

displaying a first visual representation which illustrates a short-term financial risk associated with the one or more decision variables;

displaying a second visual representation which illustrates a risk of not achieving the financial goal based upon the probability distribution; and

wherein the financial goal includes a time horizon, and wherein the short-term financial risk represents a largest amount of wealth that may be lost within a predetermined confidence level over a short amount of time relative to the time horizon.

38. In a financial analysis system, a method of presenting various aspects of financial risk to a user in order to help the user deal with and control the financial risk, the method comprising the steps of:

receiving a financial goal from the user;

receiving one or more inputs including decision variables upon which a probability distribution is dependent, the probability distribution representing probabilities over time of the user having a certain amount of wealth;

displaying a first visual representation which illustrates a short-term financial risk associated with the one or more decision variables;

displaying a second visual representation which illustrates a risk of not achieving the financial goal based upon the probability distribution; and

wherein the second visual representation comprises an icon indicating a probability of achieving the financial goal at a particular time horizon.

39. In a financial analysis system, a method of presenting various aspects of financial risk to a user in order to help the user deal with and control the financial risk, the method comprising the steps of:

receiving a financial goal from the user;

receiving one or more inputs including decision variables upon which a probability distribution is dependent, the probability distribution representing probabilities over time of the user having a certain amount of wealth;

displaying a first visual representation which illustrates a short-term financial risk associated with the one or more decision variables;

displaying a second visual representation which illustrates a risk of not achieving the financial goal based upon the probability distribution; and

wherein the first and second visual representations are displayed concurrently.

40. A method of illustrating a recommended allocation of wealth among an available set of financial products, the method comprising the steps of:

receiving one or more decision inputs;

receiving a set of available financial products, each financial product having an associated volatility;

ordering the set of available financial products by volatility; and

for each financial product in the set of available financial products

determining a recommended allocation of wealth based upon the one or more decision inputs, and

displaying a graphical indication of the recommended allocation of wealth, the graphical indication including a graphical segment having a length corresponding to the recommended allocation.

41. In a financial advisory system, a method of updating a recommendation based on a user specified constraint, the method comprising the steps of:

providing a graphical indication of a current recommended allocation of wealth among an available set of financial products, the graphical indication including graphical segments each having a size corresponding to the current recommended allocation for the associated financial product;

responsive to activation of an input device, resizing a selected graphical segment to correspond in size to a user desired allocation;

determining a new recommended allocation while keeping the allocation of the financial product corresponding to the selected segment fixed at the user desired allocation; and

updating the graphical indication to represent the new recommended allocation.

42. The method of claim 41, wherein the step of determining a new recommended allocation further includes the step of reoptimizing a remaining set of financial products.

43. The method of claim 41, wherein the step of determining a new recommended allocation occurs upon deactivation of the input device.

44. The method of claim 41, wherein the step of determining a new recommended allocation occurs in real-time.