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 7,685,046 B2
• Filed: 07/28/2003
• Issued: 03/23/2010
• 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): Kazimi; Hani
• Assistant Examiner(s): Fu; Hao
• Application Number:
  US10/627,646
• Publication Number:
  US 20040039675A1
• Time in Patent Office: 2,430 Days
• Field of Search: 705/35, 705/36.R, 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. In addition, the structure of the computer-based system of the present invention allows its cost to be based on access to or usage of the system (such as a monthly fee) as opposed to by securities orders entered into the system as per common brokerage. The result is that the investor can create a portfolio of directly owned securities with attributes, such as diversification, similar to a mutual fund.

Claims

1. A computer implemented method for managing an investment account for a customer associated with a sponsoring organization comprising:

interacting using a graphical user interface with the customer over a computer network to create a portfolio of investments that satisfy a plurality of restrictions on investment activity of the customer while meeting pre-defined investment needs of the customer;

establishing with a computer an aggregate portfolio of investments from the customer and from a plurality of other customers of the sponsoring organization, wherein said aggregating includes combining orders for investments from the customer and the plurality of other customers into a single order for each investment, including combining at least one economically unviable order for an investment, wherein said economically unviable order includes at least one trading order for a fractional share of one investment, and wherein said single order for each investment is specified as a whole number of shares of said each investment;

transmitting a portfolio of desired investments over the computer network for execution;

allocating by a computer all fractional shares of said at least one investment to all customers that ordered a fractional share of said at least one investment;

and

maintaining in a separate account up to one single share of each investment in which there was at least one trading order for a fractional share of said each investment, wherein said maintaining includes holding any remaining fractional shares of said at least one investment after said allocating for subsequent trading.

2. A computer implemented method for managing a plurality of investment accounts, each of which is associated with a third party user, comprising:

receiving data from the user via a computer network regarding the plurality of investment accounts, the data defining the amount and types of investments to be included in each investment account;

aggregating with a computer the plurality of investment accounts into a single portfolio of investments for the user;

establishing an aggregate portfolio of investments with a computer from the third party user and from a plurality of other users, wherein establishing an aggregate portfolio includes combining orders for investments from the third party user and the plurality of other users into a single order for each investment, including combining at least one economically unviable order for an investment, wherein said economically unviable order includes at least one order for a fractional share of one investment, and wherein said single order for each investment is specified as a whole number of shares of said each investment;

allocating by a computer all fractional shares of said at least one investment to all customers that ordered a fractional share of said at least one investment;

analyzing with a computer the single portfolio to determine a risk/reward characteristic of the single portfolio; and

maintaining in a separate account up to one single share of each investment in which there was at least one order for a fractional share of said each investment, wherein said maintaining includes holding any remaining fractional shares of said at least one investment after said allocating for subsequent trading.

3. A computer implemented method for creating a plurality of separate investment accounts while managing the plurality of separate investment accounts as a single investment portfolio, comprising:

establishing with a computer a separate file for each of the plurality of separate investment accounts;

establishing with a computer an aggregate portfolio of investments from the single investment portfolio and from a plurality of other customers, wherein establishing an aggregate portfolio includes combining orders for investments from the investment accounts into a single order for each investment, including combining at least one economically unviable order for an investment, wherein said economically unviable order includes at least one order for a fractional share of one investment, and wherein said single order for each investment is specified as a whole number of shares of said each investment;

analyzing with a computer the plurality of separate investment accounts as if the plurality of separate investment accounts were a single investment portfolio, the analysis including at least one of;

a risk level analysis, a diversification analysis, a concentration analysis and a sector exposure analysis for the single portfolio; and

maintaining in a separate account up to one single share of each investment in which there was at least one order for a fractional share of said each investment, wherein said maintaining includes holding any remaining fractional shares of said at least one investment after said allocating for subsequent trading.

4. A computer implemented method for managing an investment account of a plurality of customers associated with a sponsoring organization, comprising:

establishing with a computer a plurality of restrictions on the investment activity of the plurality of customers associated with the sponsoring organization;

interacting with a first customer over a computer network to identify a portfolio of investments that satisfy the plurality of defined restrictions while meeting customer defined investment needs of the first customer;

establishing with a computer an aggregate portfolio of investments from the first customer and from a plurality of other customers, wherein establishing an aggregate portfolio includes combining orders for investments from the first customer and the plurality of other customers into a single order for each investment, including combining at least one economically unviable order for an investment, wherein said economically unviable order includes at least one order for a fractional share of one investment, and wherein said single order for each investment is specified as a whole number of shares of said each investment;

transmitting a plurality of trade requests over a computer network identifying a plurality of investments in the aggregate portfolio; and

maintaining in a separate account up to one single share of each investment in which there was at least one order for a fractional share of said each investment, wherein said maintaining includes holding any remaining fractional shares of said at least one investment after said allocating for subsequent trading.