Method and apparatus for enabling individual or smaller investors or others to create and manage a portfolio of securities or other assets or liabilities on a cost effective basis

• US 7,117,176 B2
• Filed: 05/19/2003
• Issued: 10/03/2006
• Est. Priority Date: 03/11/1998
• Status: Expired due to Fees

• Current Assignee: Folio Financial Incorporated (Goldman Sachs Group Incorporated)
• Original Assignee: FOLIOfn Incorporated (Goldman Sachs Group Incorporated)
• Inventors: Wallman, Steven M.H.
• Primary Examiner(s): Bashore, Alain L.
• Application Number:
  US10/440,142
• Publication Number:
  US 20030212622A1
• Time in Patent Office: 1,233 Days
• Field of Search: 705/35, 705/36, 705/37
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• 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: G06Q 40/12 Accounting

Abstract

Smaller investors can create and manage on a cost-effective basis a complex portfolio of securities using a mechanism that enables the investor to provide to the system the investor'"'"'s preferences regarding his portfolio, to generate a portfolio, including fractional shares, that reflects the investor'"'"'s preferences. The system then permits aggregation of the orders, and netting of orders, generated by multiple investors at various times during the day for execution.

Claims

1. A computer implemented method using aggregation to enable a user to trade a plurality of market tradable assets or liabilities to form a single, customizable investment portfolio comprising:

receiving trading data from the user including user identification and preference information;

specifying, from the trading data, a user customizable portfolio that includes a plurality of distinct market tradable assets or liabilities to be owned directly by the user;

receiving from the user an order to trade the specified user customizable portfolio as a whole;

determining for the user, based on said order to trade the specified user customizable portfolio as a whole, a trading order for each of the plurality of distinct market tradable assets or liabilities to be transacted in a market for said each of the distinct market tradable assets or liabilities;

aggregating via computer, for each of the distinct market tradable assets or liabilities, the trading order for the user with one or more trading orders of one or more other users, wherein said aggregating includes combining at least one trading order involving a single share, an odd lot or a fractional share of said each distinct market tradable asset or liability with other trading orders of said each distinct market tradable asset or liability; and

executing one or more trades of each of the distinct market tradable assets or liabilities resulting from said aggregating to implement the order from the user to trade the specified user costumizable porfolio, wherein the specified user customizable porfolio is owned directly by the user after said executing.

3. The method according to claim 1, wherein said market tradable assets or liabilities comprise one or more derivative instruments.

4. The method according to claim 1, wherein said market tradable assets or liabilities comprise one or more instruments held in trust by a third party for the benefit of the user.

5. The method according to claim 1, wherein said market tradable assets or liabilities comprise one or more trust-based derivative instruments.

6. The method according to claim 1, wherein said market tradable assets or liabilities comprise one or more exchange traded funds.

7. The method according to claim 1, wherein said market tradable assets or liabilities comprise one or more exchange traded mutual funds.

8. The method according to claim 1, wherein the order to trade the specified user customizable portfolio as a whole is based on a single instruction by the user via a graphical user interface.

9. The method according to claim 1, wherein said preference information includes input to an asset allocation model and further comprising creating a resulting percentage allocation of investment classes for the user based on said asset allocation model input.

10. The method according to claim 1, further comprising transmitting a request for an electronic payment for the user to a third party payment system, and receiving, in response to said request, electronic payment data for the user electronically from the third party payment system.

11. The method according to claim 10, further comprising maintaining a payment account for the user.

12. The method according to claim 11, further comprising permitting trading of the assets or liabilities for the user only if the user'"'"'s payment account contains at least a predetermined monetary amount.

13. The method according to claim 1, wherein said aggregating comprises generating a single buy order and/or a single sell order for at least one of the assets or liabilities.

14. The method according to claim 13, wherein said executing comprises transmitting the single buy order and/or the single sell order to an electronic trading system.

15. The method according to claim 1, further comprising prompting the user for the user identification and preference information, and enabling the user to select a plurality of assets or liabilities to create a user portfolio commensurate with a percentage allocation of investment assets, and to have parameters and limitations established as to portfolio characteristics that will be permitted for the user.

16. The method according to claim 1, further comprising creating or modifiging the user'"'"'s portfolio to ensure the user'"'"'s actual portfolio matches the user'"'"'s desired portfolio in accordance with the user'"'"'s preference information.

17. The method according to claim 1, wherein the plurality of transactions include an order to trade at least one of the assets or liabilities according to a periodic monetary contribution to the user portfolio.

18. The method according to claim 17, wherein the periodic monetary contribution includes one or more of the following:

a weekly contribution, a monthly contribution and an annual contribution.

19. The method according to claim 1, further comprising receiving an order to trade by at least the user or one of the plurality of other users a fractional share of at least one of the assets or liabilities.

20. The method according to claim 1, further comprising receiving an order to trade by at least the user or one of the plurality of other users an odd lot of shares for at least one of the assets or liabilities.

21. The method according to claim 1, further comprising receiving an order to trade by at least the user or one of the plurality of other users a small number of shares for at least one of the assets or liabilities.

22. The method according to claim 1, further comprising maintaining a tax basis for one or more of the assets or liabilities traded for the user.

23. The method according to claim 1, further comprising providing information to the user regarding voting rights of the assets or liabilities held by the user.

24. The method according to claim 14, further comprising receiving actual trading pricing information regarding the single buy order and/or the single sell order for at least one of the assets or liabilities.

25. The method according to claim 24, further comprising transmitting to the user actual trading pricing information regarding each asset or liability traded for the user.

26. The method according to claim 25, further comprising modifying a display of risk and differential return of the user portfolio relative to a standard industry measurement in accordance with the actual trading pricing information for at least one of the assets or liabilities traded for the user.

27. The method according to claim 26, further comprising recommending modifications to the user portfolio to the user via a graphical user interface to make the user portfolio match a percentage allocation previously determined if the user portfolio no longer matches the percentage allocation as a result of the actual trading pricing information received.

28. The method according to claim 1, further comprising displaying a graphical user interface on a predetermined world wide web site via which the user can provide user identification information.

29. The method according to claim 1, further comprising the step of displaying on a graphical user interface risk and differential return of the user portfolio relative to a standard industry measurement as one selected from the group consisting of:

a color code, a numerical indicator, and an arrow on a dial.

30. The method according to claim 1, further comprising the step of displaying on a graphical user interface risk and differential return of the user portfolio relative to a standard industry measurement as an arrow on a range of numerical values.

31. The method according to claim 29, further comprising the step of changing the portfolio characteristics in response to the user changing one selected from the group of:

the color code, the numerical indicator, and the location of the arrow on the dial.

32. The method according to claim 30, further comprising the step of changing the portfolio characteristics in response to the user changing the location of the arrow on the range of numerical values.

33. The method according to claim 1, further comprising automatically downloading an updated version of a graphical user interface program upon detection of an out of date version.

34. The method according to claim 1, wherein the step of aggregating the plurality of transactions comprises the step of aggregating the plurality of transactions over a time period.

35. The method according to claim 34, wherein the time period includes every three hours.

36. The method according to claim 1, wherein aggregating the plurality of transaction comprises aggregating once per day at a time certain.

37. The method according to claim 1, wherein aggregating the plurality of transactions comprises aggregating a plurality of times per day at a plurality of predetermined times.

38. The method according to claim 1, wherein aggregating the plurality of transactions comprises aggregating over an amount of transactions.

39. The method according to claim 1, further comprising the step of netting buy orders against sell orders within the plurality of transactions for the user and for the one or more other users to obtain either a single buy order or a single sell order for at least one of the assets or liabilities after aggregating the plurality of transactions, and wherein said executing one or more trades comprises executing the single buy order or the single sell order.

40. The method according to claim 34, wherein executing the single buy order or the single sell order comprises sending the single buy order or the single sell order to an electronic trading system.

41. The method according to claim 1, further comprising:

receiving data from each user of the plurality of other users regarding an amount of money to be invested in a portfolio for each respective user for a predetermined period; and

accessing an electronic payment system upon receiving instructions from said each user to purchase said each respective portfolio of assets or liabilities to obtain payment for the required purchases.

42. The method according to claim 41, wherein said executing one or more trades comprises sending the aggregated transactions as a single trade in each asset or liability to an electronic trading system.

2. A computer implemented method using aggregation to enable a user to make a specified investment in a single, customizable portfolio of a plurality of distinct market tradable assets or liabilities directly owned by the user comprising:

receiving from the user an order to purchase a specified dollar amount of the single, customizable portfolio as a whole;

determining for the user, based on said order to purchase the specified dollar amount of the single, customizable portfolio as a whole, a trading order for each of the plurality of distinct market tradable assets or liabilities to be transacted in a market for said each of the distinct market tradable assets or liabilities;

aggregating via computer, for each of the distinct market tradable assets or liabilities, the trading order for the user with one or more trading orders of one or more other users, wherein said aggregating includes combining at least one trading order involving a single share, an odd lot or a fractional share of said each distinct market tradable asset or liability with other trading orders of said each distinct market tradable asset or liability from other users; and

executing one or more trades of each of the distinct market tradable assets or liabilities resulting from said aggregating to implement the order from the user to purchase the specified dollar amount of the single, customizable portfolio, wherein the specified dollar amount of the single, customizable portfolio is owned directly by the user after said executing.

43. The method accordinQ to claim 2, wherein said market tradable assets or liabilities comprise one or more derivative instruments.

44. The method according to claim 2, wherein said market tradable assets or liabilities comprise one or more instruments held in trust by a third party for the benefit of the user.

45. The method according to claim 2, wherein said market tradable assets or liabilities comprise one or more trust-based derivative instruments.

46. The method according to claim 2, wherein said market tradable assets or liabilities comprise one or more exchange traded funds.

47. The method according to claim 2, wherein said market tradable assets or liabilities comprise one or more exchange traded mutual funds.

48. A computer implemented method using aggregation to enable a user to trade a plurality of market tradable assets or liabilities to form a single, customizable investment portfolio comprising:

receiving from the user a selection of a plurality of distinct market tradable assets or liabilities to be included in a user customizable portfolio;

receiving from the user an order to trade the specified user customizable portfolio as a whole;

determining for the user, based on said order to trade the specified user customizable portfolio as a whole, a trading order for each of the plurality of distinct market tradable assets or liabilities to be transacted in a market for said each of the distinct market tradable assets or liabilities;

aggregating via computer, for each of the distinct market tradable assets or liabilities, the trading order for the user with one or more trading orders of one or more other users, wherein said aggregating includes combining at least one trading order involving either a single share, an odd lot or a fractional share of said each distinct market tradable asset or liability with other trading orders of said each distinct market tradable asset or liability; and

executing one or more trades of each of the distinct market tradable assets or liabilities resulting from said aggregating to implement the order from the user to trade the specified user customizable portfolio, wherein each of the plurality of distinct market tradable assets or liabilities are included in the specified user customizable portfolio user after said executing.

49. The method according to claim 48, wherein said market tradable assets or liabilities comprise one or more derivative instruments.

50. The method according to claim 48, wherein said market tradable assets or liabilities comprise one or more instruments held in trust by a third party for the benefit of the user.

51. The method according to claim 48, wherein said market tradable assets or liabilities comprise one or more trust-based derivative instruments.

52. The method according to claim 48, wherein said market tradable assets or liabilities comprise one or more exchange traded funds.

53. The method according to claim 48, wherein said market tradable assets or liabilities comprise one or more exchange traded mutual funds.

54. The method according to claim 48, wherein said selection includes selecting from among a set of predefined allocations of a plurality of assets or liabilities.