Investment advice systems and methods

• US 7,249,080 B1
• Filed: 10/25/2000
• Issued: 07/24/2007
• Est. Priority Date: 10/25/1999
• Status: Active Grant

• Current Assignee: Tegra118 Wealth Solutions, Inc.
• Original Assignee: Upstream Technologies LLC (Fiserv Incorporated)
• Inventors: Walker, James L., Schulman, Evan, Samuelson, Paul, Hoffman, Mark, McRae, Donald A.
• Primary Examiner(s): NGUYEN, NGA B
• Application Number:
  US09/696,762
• Time in Patent Office: 2,463 Days
• Field of Search: 705/35, 705/37, 705/38, 345/700
• 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 40/03 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 40/08 Insurance
• CPC Class Codes: G06Q 40/10 Tax strategies
• CPC Class Codes: G06Q 50/16 Real estate

Abstract

The present invention provides investment advice systems. One version of the present invention provides investment advice systems that allow a user to select one or more advisors from a list of investment advisors. According to this version of the invention, the end user can receive advice on a particular transaction either separately from each investment advisor or in consensus. The system offers advice in part on the user'"'"'s portfolio, tax position and risk profile and in part on the advisors evaluation of current market conditions. Thus, when a user is considering making a transaction, the user can obtain advice that can take into portfolio information including a user'"'"'s proposed transaction and/or user portfolio information. A user armed with the above-described customized advice can execute a specific transaction and have their portfolio updated to reflect execution of that (those) order(s). In an alternative embodiment, a user'"'"'s desire to buy or sell a security and/or a need for rebalancing a user'"'"'s portfolio can generate transaction(s). As a result, the system will generate a buy/sell list (including recommended alternatives) from which a user can select.

Claims

1. A computer-implemented method for providing investment advice to a client over a computer network, the method comprising:

providing a database maintaining portfolio information for a plurality of securities portfolios;

providing a server computer operably coupled to the database and accessible via client computers to a plurality of clients, the server computer including;

an asset allocator operative to receive one of a spend cash request, a raise cash request, a rebalance request, and a re-rank request;

a ranker component in communication with the asset allocator;

a security analyst component in communication with the asset allocator; and

a portfolio component in communication with the asset allocator; and

managing a securities portfolio identified by the database for a client by;

receiving portfolio information;

using a ranker component to pass a get benchmark request to the portfolio component;

normalizing security forecasts from at least one advisor and translating the normalized forecasts into security forecast rankings;

using a ranker component to pass a get security rankings request to a security analyst component;

determining risk rankings for relevant securities using portfolio minus benchmark weights;

determining combined rankings for proposed trades of relevant securities based at least in part on risk rankings and on security forecast rankings; and

generating an order list based on the combined rankings.

2. The computer-implemented method of claim 1, wherein the portfolio information maintained by the database includes tax lot information.

3. The computer-implemented method of claim 2, wherein managing a securities portfolio includes:

requesting tax lot information from the database for the portfolio, and

proposing securities transactions to the client based at least in part on the tax lot information for the securities portfolio.

4. The computer-implemented method of claim 3, wherein providing a server comprises:

providing a server including a broker connection aggregator; and

wherein managing a securities portfolio further comprises;

invoking the broker connection aggregator to provide a connection to a plurality of brokers over a computer network and to allow a client to execute securities transactions, through the broker connection, for securities portfolios identified by the database.

5. The computer-implemented method of claim 1, wherein providing a server further comprises

providing a server including a portfolio tracker;

and wherein managing a securities portfolio further comprises

invoking the portfolio tracker to receive portfolio information for a securities portfolio from a client and to store the portfolio information for the securities portfolio in the database.

6. A system for providing investment advice, the system comprising:

a database identifying a plurality of securities portfolios and maintaining portfolio information associated with the security portfolios; and

a server computer operably coupled to the database and accessible via client computers to a plurality of clients;

the server computer including;

a trade advisor component operative to receive, from the database, portfolio information for a securities portfolio of a client, the trade advisor component proposing securities transactions based on a combined ranking of a return ranking and a risk ranking for each tradable security available to the client, the return ranking being based on an aggregation of normalized securities rankings from one or more analysts for each tradable security, the risk ranking being based on a normalized marginal contribution to risk of each security to the portfolio, the normalized marginal contribution to risk having been scaled by a factor reflecting a client'"'"'s risk aversion.

7. The system of claim 6, wherein the portfolio information maintained by the database includes tax lot information for the securities included in the portfolios identified by the database.

8. The system of claim 7, wherein the combined ranking is further based on a tax ranking for securities in the portfolio, the tax ranking for each security being based on a normalized and scaled marginal tax gain or marginal tax loss resulting from the sale of the security as a percentage of the current price of the security.

9. The system of claim 6, wherein the server further includes graphical user interface generation means for providing a user interface, the user interface including a client proposed transaction input control whereby a client can input a proposed transaction for a portfolio identified by the investment advice service.

10. The system of claim 9, wherein the trade advisor component is operative to propose alternative transactions to the proposed transaction of the client based at least in part on the combined ranking for the proposed transaction.

11. A system for providing trading advice for a portfolio of securities, the system comprising:

a ranker component operative to receive a request to rank relevant securities;

a portfolio component in communication with the ranker component and operative to receive a get benchmark request and a get tax lots request from the ranker component;

a security analyst component in communication with the ranker component and operative to receive a get security rankings request from the ranker component,

the ranker component operative;

to provide risk rankings of relevant securities using portfolio minus benchmark weights in determining a marginal contribution to risk associated with a relevant security;

to determine tax rankings based in part on tax lot data; and

to determine combined rankings of relevant securities as a weighted sum of risk rankings, security forecast rankings and tax rankings, the ranker component determining a marginal contribution to risk by;

adding a specified weighting to the portfolio;

determining a revised contribution to factor risk and residual risk;

subtracting original values; and

dividing by a change in weight; and

an asset allocator in communication with the ranker component, the asset allocator operative to receive combined rankings for relevant securities from the ranker component and to create a trade list based at least in part on the combined rankings.

12. A system for providing trading advice for a portfolio of securities, the system comprising:

a ranker component operative to receive a request to rank relevant securities;

a portfolio component in communication with the ranker component and operative to receive a get benchmark request from the ranker component; and

a security analyst component in communication with the ranker component and operative to receive a get security rankings request from the ranker component,

the ranker component operative to determine risk rankings of relevant securities using portfolio minus benchmark weights in determining combined rankings of relevant securities based at least in part on risk rankings and on security forecast rankings.

13. The system of claim 12 wherein the portfolio component is operative to receive a get tax lots request from the ranker component, wherein the ranker component is operative to determine tax rankings based in part on tax lot data, and wherein the ranker component is operative to determine the combined rankings of relevant securities as a weighted sum of the risk rankings, the security forecast rankings and the tax rankings.

14. The system of claim 12 wherein the system further comprises:

an asset allocator in communication with the ranker component, the asset allocator operative to receive combined rankings for relevant securities from the ranker component and to create a trade list based at least in part on the combined rankings.

15. The system of claim 12 wherein the ranker component is operative to determine a risk ranking for a relevant security by determining a marginal contribution to risk associated with the relevant security and wherein the ranker component is operative to determine the combined rankings as a weighted sum of the risk rankings and the security forecast rankings.

16. The system of claim 15 wherein the ranker component is operative to determine a risk ranking for a relevant security by adding a specified weighting to the portfolio, determining a revised contribution to factor risk and residual risk, subtracting original values, and dividing by a change in weight.

17. The system of claim 16 wherein the ranker component is operative to determine a risk ranking for a relevant security by:

for the relevant security adding about a 0.1% weighting to the portfolio.

18. The system of claim 17 wherein the relevant securities comprise a universe of securities including securities held in the portfolio and securities not held in the portfolio.

19. The system of claim 14 wherein the asset allocator is operative to receive one of a raise cash value, a spend cash value and a maximum turnover and to pass a rank portfolio request to the ranker component.

20. A method for providing trading advice for a portfolio of securities, the method comprising

receiving portfolio information;

using a ranker component to pass a get benchmark request to a portfolio component;

normalizing security forecasts from at least one advisor and translating the normalized forecasts into security forecast rankings;

using a ranker component to pass a get security rankings request to a security analyst component;

determining risk rankings for relevant securities using portfolio minus benchmark weights;

determining combined rankings for proposed trades of relevant securities based at least in part on risk rankings and on security forecast rankings; and

generating an order list based on the combined rankings.

21. The method of claim 20 wherein the method further comprises:

using the ranker component to pass a get tax lots request to the portfolio component; and

determining tax rankings based at least in part on tax lot data; and

wherein determining combined rankings comprises determining combined rankings as a weighted sum of the risk rankings, the security forecast rankings and the tax rankings.

22. The method of claim 20 wherein determining risk rankings comprises determining a risk ranking for a relevant security by determining a marginal contribution to risk associated with the relevant security and wherein determining the combined rankings comprises determining the combined rankings as a weighted sum of the risk rankings and the security forecast rankings.

23. The method of claim 20 wherein determining a risk ranking for a relevant security comprises:

determining a risk ranking for the relevant security by;

adding a specified weighting to the portfolio;

determining a revised contribution to factor risk and residual risk;

subtracting original values; and

dividing by a change in weight.

24. The method of claim 23 wherein determining a risk ranking comprises determining a risk ranking for a relevant security by:

for the relevant security adding about a 0.1% weighting to the portfolio.

25. The method of claim 20 wherein the relevant securities comprise a universe of securities including securities held in the portfolio and securities not held in the portfolio.

26. The method of claim 20 wherein normalizing security rankings comprises collecting security rankings for a security from a plurality of security analysts, aggregating the security rankings for the security onto a uniform ranking scale and determining a consensus forecast from a plurality of security analysts.

27. A method for assisting a user to manage a plurality of portfolios, the method comprising:

displaying a rebalance accounts display for providing information about a plurality of accounts;

allowing a user to select one or more accounts for rebalancing;

allowing a user to select a trading template to apply to the selected accounts wherein at least one of the trades in the trade template is generated by a method including;

using a ranker component to pass a get benchmark request to a portfolio component;

using a ranker component to pass a get security rankings request to a security analyst component;

determining risk rankings for relevant securities using portfolio minus benchmark weights;

determining combined rankings for proposed trades of relevant securities based at least in part on risk rankings and on security forecast rankings; and

generating an order list based on the combined rankings; and

applying the trading template to the selected accounts.

28. The method of claim 27, wherein the method further comprises:

displaying a my accounts display including;

an account list display which lists information about accounts that the user manages;

a stock alerts display which lists information about stocks of note; and

a risk alerts display which provides information about accounts with a high-risk rating.

29. The method of claim 28, wherein the method further comprises:

displaying a trade execution results page including a save trade template display that allows a user to name and save a set of trades as a trade template for rebalancing other accounts.

30. The method of claim 27, wherein displaying a rebalance accounts display for providing information about a plurality of accounts includes current risk and stock rating and projected risk and stock rating.