Computer-implemented apparatus for automating and executing investment planning for a client

• US 7,552,079 B2
• Filed: 12/11/2006
• Issued: 06/23/2009
• Est. Priority Date: 06/09/1999
• Status: Expired due to Fees

• Current Assignee: The Vanguard Group Incorporated
• Original Assignee: The Vanguard Group Incorporated
• Inventors: Bove, Steven A., Wileczek, Ralph C., Gill, Jeanne
• Primary Examiner(s): Kazimi; Hani
• Assistant Examiner(s): Vyas; Abhishek
• Application Number:
  US11/636,894
• Publication Number:
  US 20070083455A1
• Time in Patent Office: 925 Days
• Field of Search: 705 35- 45
• 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 40/10 Tax strategies

Abstract

An apparatus automates and executes investment planning for a client. The apparatus includes a processor and a trade execution computer. The processor receives data regarding the client'"'"'s current asset portfolio, including the taxable status of each asset, the client'"'"'s desired asset allocation, and the client'"'"'s preferred domain. The processor is configured to use the data to automatically generate financial transaction recommendations for modifying the client'"'"'s current asset portfolio to reach as close as possible to the desired asset allocation and the preferred domain. The recommendations include specific recommendations for selling amounts of selected current assets and specific recommendations for buying amounts of one or more investment funds. The trade execution computer is configured to sell amounts of selected current assets or buy amounts of one or more investment funds in accordance with the specific recommendations.

Claims

1. A computer-implemented apparatus for automating and executing investment planning for a client comprising:

(a) a processor that receives data regarding;

(i) the client'"'"'s current asset portfolio, including the taxable status of each asset,

(ii) the client'"'"'s desired asset allocation, and

(iii) the client'"'"'s preferred domain,

wherein the processor is configured to automatically generate financial transaction recommendations for modifying the client'"'"'s current asset portfolio to reach as close as possible to the desired asset allocation and the preferred domain, the recommendations including specific recommendations for selling amounts of selected current assets and specific recommendations for buying amounts of one or more investment funds; and

(b) a trade execution computer configured to sell amounts of selected current assets or buy amounts of one or more investment funds in accordance with the specific recommendations.

2. The apparatus of claim 1 wherein the processor is further configured to determine tax impacts of potential sell transactions, the recommendations being selected to minimize the tax impacts.

3. The apparatus of claim 2 wherein the processor is further configured to receives data regarding:

(iv) the client'"'"'s asset portfolio preferences, including current assets that the client wishes to hold or sell, and constraints on asset selling, and the processor is further configured to automatically generate the financial transaction recommendations based on the client'"'"'s asset portfolio preferences.

4. The apparatus of claim 1 wherein the processor is further configured to determine transaction costs of potential sell transactions, the recommendations being selected to minimize the transaction costs.

5. The apparatus of claim 1 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and the processor is configured to generate a recommendation to hold the client'"'"'s conditionally repositionable assets if the client'"'"'s new asset allocation will be within a predetermined percentage of the desired asset allocation after selling all of the client'"'"'s repositionable assets.

6. The apparatus of claim 5 wherein the predetermined percentage is 3%.

7. The apparatus of claim 1 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and the processor is configured to treats the conditionally repositionable assets as non-repositionable assets when making the current asset portfolio modifications.

8. The apparatus of claim 1 wherein the client'"'"'s current asset portfolio includes repositionable assets, non-repositionable assets and conditionally repositionable assets, and the processor is configured to generate a recommendation to sell the client'"'"'s repositionable assets until the tax cost of selling equals a predetermined percentage of the client'"'"'s current asset portfolio.

9. The apparatus of claim 1 wherein the recommendations include recommendations to (i) add specific amounts of shares to currently held mutual funds, and (ii) open one or more new mutual funds and contribute specific amounts of shares to the new funds.

10. The apparatus of claim 1 wherein the desired asset allocation is determined based upon the client'"'"'s Ibbotson score.

11. The apparatus of claim 1 wherein the processor is further configured to generate target portfolio amounts and adjusted target portfolio amounts for each asset category in the desired asset allocation.

12. The apparatus of claim 1 further comprising:

(c) an input data processor that is configured to;

(i) receives information regarding the client which is necessary to determine the client'"'"'s desired asset allocation and the client'"'"'s preferred domain, and

(ii) determines and outputs the client'"'"'s desired asset allocation and the client'"'"'s preferred domain, wherein the outputted desired asset allocation and preferred domain are inputted into the processor.