Stochastic modeling module for providing financial planning and advice
First Claim
1. A stochastic modeling system for facilitatng financial advising and planning comprising:
- a stochastic modeling processor,a non-transitory memory configured to communicate with the processor,the memory having instructions stored thereon that, in response to execution by the processor, cause the processor to be capable of performing operations comprising;
facilitating, by the processor, use of data from a financial portfolio planning of a user in a stochastic modeling analysis using at least one of;
a stationary bootstrap sampling method or a synchronous stationary bootstrap sampling method;
creating, by the processor, assumption data by performing a first stochastic simulation based upon an assumption, wherein the assumption comprises an assumption based upon a disability, a retirement date, a death or a divorce;
determining, by the processor, a customized strategy by performing a second stochastic simulation to analyze assets of the user with respect to fulfilling goals based on the assumption and the assumption data;
aggregating, by the processor, successes and failures produced in the second stochastic simulation to develop the probability of success with respect to fulfilling goals based on an assumption;
performing, by the processor, the second stochastic simulation for a plurality of period increments based on a simulation period frequency, wherein the simulation period frequency is annual and each of a plurality of cashflows is annualized, and wherein the simulation for each of the plurality of period increments is configured to;
project cashflows comprising incomes, savings, liabilities, premiums, and goals expenses;
determine a beginning asset balance for each portfolio in a plurality of simulation portfolios based on an asset owner and asset type of each investment asset;
in response to the simulation period being greater than 1, apply an inflation factor to incomes, expenses, and savings;
in response to at least one of (i) an income and policy benefit cashflows start period being equal to or greater than the simulation period, or (ii) the income and policy benefit cashflows end period being less than or equal to the simulation period, add the income and policy benefit cashflows to a regular asset simulation portfolio;
in response to an adjustment to savings cashflows start period being equal to or greater than the simulation period and the adjustments to savings cashflows end period being less than or equal to the simulation period, add the adjustments to savings cashflows to the regular asset simulation portfolio;
in response to at least one of the savings to regular assets cashflows start period is equal to or greater than the simulation period or the savings to regular assets cashflows end period being less than or equal to the simulation period, add savings to regular assets cashflows and the accumulation piece of a Universal Life premium to the regular contribution simulation portfolio;
in response to the savings to retirement assets start period being equal to or greater than the simulation period and the savings to retirement assets end period is less than or equal to the simulation period, add savings to retirement assets cashflows assets to the retirement simulation portfolio;
in response to the expense cashflows start period being equal to or greater than the simulation period and the expense cashflows end period being less than or equal to the simulation period, subtract a subset of expense cashflows from the simulation portfolios, wherein the subset of cashflows expense comprises expense types comprising at least one of living expenses, goal expenses, liabilities, premiums, or savings, wherein the subset of expense cashflows are subtracted from the simulation portfolios in a withdrawal order including;
1) regular asset simulation portfolio,
2) regular contribution simulation portfolio,
3) retirement simulation portfolio;
for the simulation period, use stochastic sampling to determine a cash rate of return, a bond rate of return, and an equity rate of return;
for each simulation portfolio in the plurality of simulation portfolios, determine an ending period balance by;
calculating an investment return for the simulation portfolio as (a percentage of cash * the cash rate of return)+(a percentage of bonds * the bond return)+(a percentage of equity * the equity return), wherein an allocation is associated with the simulation portfolio, the allocation comprising the percentage of cash, the percentage of bonds and the percentage of equity;
adjusting the investment return for an estimated tax effect; and
adding the investment return to the portfolio balance;
increment a positive balance counter by 1 in response to an ending period balance being greater than 0; and
determine a probability of success by dividing the positive balance counter by the total number of period increments in the plurality of period increments.
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Accused Products
Abstract
The present invention provides systems and methods for facilitating financial advising and planning for a user. The system includes a portfolio integration module that integrates goals, assets, savings, and risk tolerance to develop a customized strategy for financial portfolio planning. A portfolio reconciler module facilitates comparison of the customized strategy to other strategies and projected user financial decisions in order to further facilitate the financial portfolio planning. A stochastic modeling module uses data from the portfolio integration module and the portfolio reconciler module in a stochastic modeling analysis using a synchronous stationary bootstrap sampling method to construct a proposed situation portfolio. A simulator module forecasts the effects of the proposed situation portfolio on the user'"'"'s portfolio, and monitoring, simulating, designing, and testing the portfolio integration module, the portfolio reconciler module, and the stochastic modeling module.
55 Citations
18 Claims
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1. A stochastic modeling system for facilitatng financial advising and planning comprising:
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a stochastic modeling processor, a non-transitory memory configured to communicate with the processor, the memory having instructions stored thereon that, in response to execution by the processor, cause the processor to be capable of performing operations comprising; facilitating, by the processor, use of data from a financial portfolio planning of a user in a stochastic modeling analysis using at least one of;
a stationary bootstrap sampling method or a synchronous stationary bootstrap sampling method;creating, by the processor, assumption data by performing a first stochastic simulation based upon an assumption, wherein the assumption comprises an assumption based upon a disability, a retirement date, a death or a divorce; determining, by the processor, a customized strategy by performing a second stochastic simulation to analyze assets of the user with respect to fulfilling goals based on the assumption and the assumption data; aggregating, by the processor, successes and failures produced in the second stochastic simulation to develop the probability of success with respect to fulfilling goals based on an assumption; performing, by the processor, the second stochastic simulation for a plurality of period increments based on a simulation period frequency, wherein the simulation period frequency is annual and each of a plurality of cashflows is annualized, and wherein the simulation for each of the plurality of period increments is configured to; project cashflows comprising incomes, savings, liabilities, premiums, and goals expenses; determine a beginning asset balance for each portfolio in a plurality of simulation portfolios based on an asset owner and asset type of each investment asset; in response to the simulation period being greater than 1, apply an inflation factor to incomes, expenses, and savings; in response to at least one of (i) an income and policy benefit cashflows start period being equal to or greater than the simulation period, or (ii) the income and policy benefit cashflows end period being less than or equal to the simulation period, add the income and policy benefit cashflows to a regular asset simulation portfolio; in response to an adjustment to savings cashflows start period being equal to or greater than the simulation period and the adjustments to savings cashflows end period being less than or equal to the simulation period, add the adjustments to savings cashflows to the regular asset simulation portfolio; in response to at least one of the savings to regular assets cashflows start period is equal to or greater than the simulation period or the savings to regular assets cashflows end period being less than or equal to the simulation period, add savings to regular assets cashflows and the accumulation piece of a Universal Life premium to the regular contribution simulation portfolio; in response to the savings to retirement assets start period being equal to or greater than the simulation period and the savings to retirement assets end period is less than or equal to the simulation period, add savings to retirement assets cashflows assets to the retirement simulation portfolio; in response to the expense cashflows start period being equal to or greater than the simulation period and the expense cashflows end period being less than or equal to the simulation period, subtract a subset of expense cashflows from the simulation portfolios, wherein the subset of cashflows expense comprises expense types comprising at least one of living expenses, goal expenses, liabilities, premiums, or savings, wherein the subset of expense cashflows are subtracted from the simulation portfolios in a withdrawal order including;
1) regular asset simulation portfolio,
2) regular contribution simulation portfolio,
3) retirement simulation portfolio;for the simulation period, use stochastic sampling to determine a cash rate of return, a bond rate of return, and an equity rate of return; for each simulation portfolio in the plurality of simulation portfolios, determine an ending period balance by; calculating an investment return for the simulation portfolio as (a percentage of cash * the cash rate of return)+(a percentage of bonds * the bond return)+(a percentage of equity * the equity return), wherein an allocation is associated with the simulation portfolio, the allocation comprising the percentage of cash, the percentage of bonds and the percentage of equity; adjusting the investment return for an estimated tax effect; and adding the investment return to the portfolio balance; increment a positive balance counter by 1 in response to an ending period balance being greater than 0; and determine a probability of success by dividing the positive balance counter by the total number of period increments in the plurality of period increments. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 17, 18)
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13. A non-transitory, tangible computer-readable medium having computer-executable instructions stored thereon that, if executed by a stochastic modeling computer, cause the computer to perform a operations comprising:
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facilitating, by the computer, use of data from a financial portfolio planning of a user in a stochastic modeling analysis using at least one of;
a stationary bootstrap sampling method or a synchronous stationary bootstrap sampling method;creating, by the computer, assumption data by performing a first stochastic simulation based upon an assumption, wherein the assumption comprises an assumption based upon a disability, a retirement date, a death or a divorce; determining, by the computer, a customized strategy by performing a second stochastic simulation to analyze assets of the user with respect to fulfilling goals based on the assumption and the assumption data; aggregating, by the computer, successes and failures produced in the second stochastic simulation to develop the probability of success with respect to fulfilling goals based on an assumption; performing, by the computer, the second stochastic simulation for a plurality of period increments based on a simulation period frequency, wherein the simulation period frequency is annual and each of a plurality of cashflows is annualized, and wherein the simulation for each of the plurality of period increments comprises; projecting cashflows comprising incomes, savings, liabilities, premiums, and goals expenses; determining a beginning asset balance for each portfolio in a plurality of simulation portfolios based on an asset owner and asset type of each investment asset; in response to the simulation period being greater than 1, applying an inflation factor to incomes, expenses, and savings; in response to at least one of (i) an income and policy benefit cashflows start period being equal to or greater than the simulation period, or (ii) the income and policy benefit cashflows end period being less than or equal to the simulation period, adding the income and policy benefit cashflows to a regular asset simulation portfolio; in response to an adjustment to savings cashflows start period being equal to or greater than the simulation period and the adjustments to savings cashflows end period being less than or equal to the simulation period, adding the adjustments to savings cashflows to the regular asset simulation portfolio; in response to at least one of the savings to regular assets cashflows start period is equal to or greater than the simulation period or the savings to regular assets cashflows end period being less than or equal to the simulation period, adding savings to regular assets cashflows and the accumulation piece of a Universal Life premium to the regular contribution simulation portfolio; in response to the savings to retirement assets start period being equal to or greater than the simulation period and the savings to retirement assets end period is less than or equal to the simulation period, adding savings to retirement assets cashflows assets to the retirement simulation portfolio; in response to the expense cashflows start period being equal to or greater than the simulation period and the expense cashflows end period being less than or equal to the simulation period, subtracting a subset of expense cashflows from the simulation portfolios, wherein the subset of cashflows expense comprises expense types comprising at least one of living expenses, goal expenses, liabilities, premiums, or savings, wherein the subset of expense cashflows are subtracted from the simulation portfolios in a withdrawal order including;
1) regular asset simulation portfolio,
2) regular contribution simulation portfolio,
3) retirement simulation portfolio;for the simulation period, using stochastic sampling to determine a cash rate of return, a bond rate of return, and an equity rate of return for each simulation portfolio in the plurality of simulation portfolios, determining an ending period balance by; calculating an investment return for the simulation portfolio as (a percentage of cash * the cash rate of return)+(a percentage of bonds * the bond return)+(a percentage of equity * the equity return), wherein an allocation is associated with the simulation portfolio, the allocation comprising the percentage of cash, the percentage of bonds and the percentage of equity; adjusting the investment return for an estimated tax effect; and adding the investment return to the portfolio balance; incrementing a positive balance counter by 1 in response to an ending period balance being greater than 0; and determining a probability of success by dividing the positive balance counter by the total number of period increments in the plurality of period increments.
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Specification