System and method for referral fee processing in accounts managed by financial advisors

• US 7,747,497 B1
• Filed: 12/19/2008
• Issued: 06/29/2010
• Est. Priority Date: 04/12/2002
• Status: Active Grant

• Current Assignee: Charles Schwab & Company Incorporated (Charles Schwab Corporation)
• Original Assignee: Charles Schwab & Company Incorporated (Charles Schwab Corporation)
• Inventors: Graves, Gerald, Welling, Charles D., Hirsch, Steven, McWhinney, Deborah D., Rymer, Joshua, Salesky, Andrew
• Primary Examiner(s): Patel; Jagdish N
• Assistant Examiner(s): Chandler; Sara
• Application Number:
  US12/339,569
• Time in Patent Office: 557 Days
• Field of Search: 705/35
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method and apparatus which provides for a referral program where a financial institution, such as a broker dealer, can refer customers to an independent financial advisor, under an on-going referral fee sharing agreement. The on-going referral fee sharing agreement provides that the financial advisor will pay the referring financial institution an on-going referral fee based on the asset management fee that the advisor charges. These referral fees are processed automatically and the transfers are done electronically, allowing the referral program to be implemented efficiently and effectively.

Claims

1. A computer system including financial account data which implements a program by which a referring party can, under an on-going referral fee sharing agreement, refer an investor to a financial advisor who provides asset management services, comprising:

a database system configured to store financial account data, the financial account data identifying a referred financial account which is managed by the financial advisor, is custodied by the referring party, and which is subject to the on-going referral fee sharing agreement; and

a processor system configured to process the financial account data, wherein the processor system is programmed to

periodically analyze the financial account data in the database system,

identify the referred financial account based on the financial account data analyzed, and

periodically electronically transfer a referral fee from the referred financial account to the referring party, wherein the referral fee is based on a successful referral which results in the investor engaging the services of the financial advisor.

2. The computer system of claim 1 wherein the processor system is further programmed to

determine an asset management fee charged to the referred financial account managed by the financial advisor, and

determine the referral fee based on the asset management fee.

3. The computer system of claim 2 wherein the processor system is further programmed to determine the referral fee on a periodic basis.

4. The computer system of claim 3 wherein the referral fee is calculated by the processor system to be 15% of the asset management fee.

5. The computer system of claim 1 wherein the processor system is programmed to

determine an asset value based on a plurality of assets held in the referred financial account, and

determine the referral fee based on the determination of the asset value.

6. The computer system of claim 1 wherein the processor is further programmed to

identify a plurality of referred financial accounts managed by the financial advisor and to periodically determine a referral fee for each of the plurality of referred financial accounts managed by the financial advisor, and to determine an aggregate referral fee for the plurality of referred financial accounts managed by the financial advisor, wherein the aggregate referral fee is equal to the sum of the referral fees for each of the plurality of referred financial accounts managed by the financial advisor.

7. The computer system of claim 6, wherein the processor is further programmed to compare the aggregate referral fee with a specified minimum amount, and determine when the aggregate referral fee is exceeded by the specified minimum amount.

8. The computer system of claim 6 wherein the plurality of referred financial accounts are associated with a plurality of investors.

9. The computer system of claim 1 wherein the processor system is further programmed to determine the referral fee on a quarterly basis.

10. The computer system of claim 1, wherein the referral fee is based on a fixed percentage of an advisors asset management fee.

11. The computer system of claim 1 further comprising a communication port for connecting to the internet.