User interface for a financial advisory system

• US 7,774,257 B2
• Filed: 11/01/2007
• Issued: 08/10/2010
• Est. Priority Date: 12/02/1997
• Status: Expired due to Fees

• Current Assignee: Financial Engines, LLC.
• Original Assignee: Financial Engines Incorporated (Edelman Financial Engines LLC)
• Inventors: Tauber, Ellen, Fine, Ken, Jones, Christopher L., Sharpe, William F., Maggioncalda, Jeff N.
• Primary Examiner(s): Kramer; James A
• Assistant Examiner(s): Vezeris; James A
• Application Number:
  US11/933,555
• Publication Number:
  US 20080154792A1
• Time in Patent Office: 1,013 Days
• Field of Search: 705/36, 705/35, 705/36.R
• 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 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• 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

Abstract

A financial advisory system and a user interface for such a system are provided. According to one embodiment, information regarding a retirement income goal of an individual is received. Multiple input values for corresponding decision variables are also received. The decision variables include an indication regarding a target retirement age for the individual, an indication regarding anticipated monetary contributions directed toward the retirement income goal and an indication regarding the individual'"'"'s risk tolerance. A probability distribution dependent upon the decision variables is generated based on simulated market return scenarios and representing a set of possible future portfolio values based on the plurality of inputs. Finally, feedback regarding the likelihood of the individual achieving the retirement income goal is provided in view of the input values by graphically depicting one or more of the set of possible future portfolio values relative to a graphical indication of the retirement income goal.

Claims

1. A computer-implemented method comprising:

receiving, by a processor of one or more computer systems executing a user interface module, information regarding a retirement income goal of an individual;

receiving by the user interface module a plurality of input values for corresponding decision variables, including an indication regarding a target retirement age for the individual, an indication regarding anticipated monetary contributions directed toward the retirement income goal and an express indication regarding the individual'"'"'s risk tolerance, upon which a probability distribution is dependent, the probability distribution generated based on simulated market return scenarios and representing a set of possible future portfolio values based on the plurality of input values, wherein the express indication regarding the individual'"'"'s risk tolerance is constrained to be within a defined range of risk and wherein the individual'"'"'s risk tolerance represents the individual'"'"'s willingness to accept variance in the set of possible future portfolio values in view of expected returns of an investment portfolio of the individual that is associated with the retirement income goal; and

providing by the user interface module feedback regarding the likelihood of the individual achieving the retirement income goal in view of the plurality of input values and providing information regarding a cross section of the probability distribution corresponding to the plurality of input values by concurrently graphically representing information regarding a plurality of the set of possible future portfolio values relative to a graphical indication of the retirement income goal.

2. The method of claim 1, wherein a first possible future portfolio value of the plurality of the set of possible future portfolio values represents a first monetary value of the investment portfolio and wherein the first monetary value or greater is achieved in 50% or more of the simulated market return scenarios.

3. The method of claim 2, wherein a second possible future portfolio value of the plurality of the set of possible future portfolio values represents a second monetary value of the investment portfolio and wherein the second monetary value or greater is achieved in a greater number of the simulated market return scenarios than the first possible future portfolio value.

4. The method of claim 3, wherein the second possible future portfolio value or greater is achieved in 95% or more of the simulated market return scenarios.

5. The method of claim 3, wherein a third possible future portfolio value of the plurality of the set of possible future portfolio values represents a third monetary value of the investment portfolio and wherein the third monetary value or greater is achieved in fewer of the simulated market return scenarios than the first possible future portfolio value.

6. The method of claim 5, wherein the third possible future portfolio value or greater is achieved in 5% or fewer of the simulated market return scenarios.

7. The method of claim 1, further comprising providing a visual indication indicative of a probability of achieving the retirement income goal.

8. The method of claim 7, further comprising determining the probability of achieving the retirement income goal by evaluating the cumulative probability distribution that meets or exceeds the retirement income goal.

9. The method of claim 1, wherein the plurality of input values are received based on relative positioning of corresponding slider bar graphical input objects.

37. The method of claim 1, wherein the simulated market return scenarios represent scenarios resulting from simulation of market return scenarios forward in time for the investment portfolio.

38. The method of claim 1, wherein the defined range of risk comprises a feasible range of risk available to the individual based on a set of financial products that are available to be part of the investment portfolio.

10. A program storage device readable by one or more computer systems tangibly embodying a program of instructions executable by one or more processors of the one or more computer systems to perform method steps for conveying a likelihood of an individual achieving a retirement income goal, said method steps comprising:

receiving information regarding the retirement income goal of the individual;

receiving a plurality of input values for corresponding decision variables, including an indication regarding a target retirement age for the individual, an indication regarding anticipated monetary contributions directed toward the retirement income goal and an express indication regarding the individual'"'"'s risk tolerance, upon which a probability distribution is dependent, the probability distribution generated based on simulated market return scenarios and representing a set of possible future portfolio values based on the plurality of input values, wherein the express indication regarding the individual'"'"'s risk tolerance is constrained to be within a defined range of risk and wherein the individual'"'"'s risk tolerance represents the individual'"'"'s willingness to accept variance in the set of possible future portfolio values in view of expected returns of an investment portfolio of the individual that is associated with the retirement income goal; and

providing feedback regarding the likelihood of the individual achieving the retirement income goal in view of the plurality of input values and providing information regarding a cross section of the probability distribution corresponding to the plurality of input values by concurrently graphically depicting a plurality of the set of possible future portfolio values relative to a graphical indication of the retirement income goal.

11. The program storage device of claim 10, wherein a first possible future portfolio value of the plurality of the set of possible future portfolio values represents a first monetary value of the investment portfolio and wherein the first monetary value or greater is achieved in 50% or more of the simulated market return scenarios.

12. The program storage device of claim 11, wherein a second possible future portfolio value of the plurality of the set of possible future portfolio values represents a second monetary value of the investment portfolio and wherein the second monetary value or greater is achieved in a greater number of the simulated market return scenarios than the first possible future portfolio value.

13. The program storage device of claim 12, wherein the second possible future portfolio value or greater is achieved in 95% or more of the simulated market return scenarios.

14. The program storage device of claim 12, wherein a third possible future portfolio value of the plurality of the set of possible future portfolio values represents a third monetary value of the investment portfolio and wherein the third monetary value or greater is achieved in fewer of the simulated market return scenarios than the first possible future portfolio value.

15. The program storage device of claim 14, wherein the third possible future portfolio value or greater is achieved in 5% or fewer of the simulated market return scenarios.

16. The program storage device of claim 10, further comprising providing a visual indication indicative of a probability of achieving the retirement income goal.

17. The program storage device of claim 16, further comprising determining the probability of achieving the retirement income goal by evaluating the cumulative probability distribution that meets or exceeds the retirement income goal.

18. The program storage device of claim 10, wherein the plurality of input values are received based on relative positioning of corresponding slider bar graphical input objects.

39. The program storage device of claim 10, wherein the defined range of risk comprises a feasible range of risk available to the individual based on a set of financial products that are available to be part of the investment portfolio.

19. A computer-implemented method comprising:

a step for receiving, by a processor of one or more computer systems executing a user interface module, information regarding a retirement income goal of an individual;

a step for receiving, by the user interface module, a plurality of input values for corresponding decision variables, including an indication regarding a target retirement age for the individual, an indication regarding anticipated monetary contributions directed toward the retirement income goal and an express indication regarding the individual'"'"'s risk tolerance, upon which a probability distribution is dependent, the probability distribution generated based on simulated market return scenarios and representing a set of possible future portfolio values based on the plurality of input values, wherein the express indication regarding the individual'"'"'s risk tolerance is constrained by the user interface module to be within a feasible range of risk available to the individual based on a set of financial products that are available to be part of an investment portfolio associated with the retirement income goal and wherein the individual'"'"'s risk tolerance represents the individual'"'"'s willingness to accept variance in the set of possible future portfolio values in view of expected returns of the investment portfolio; and

a step for providing, by the user interface module, feedback regarding the likelihood of the individual achieving the retirement income goal in view of the plurality of input values and providing information regarding a cross section of the probability distribution corresponding to the plurality of input values by concurrently graphically depicting a plurality of the set of possible future portfolio values relative to a graphical indication of the retirement income goal.

20. The method of claim 19, wherein a first possible future portfolio value of the plurality of the set of possible future portfolio values represents a first monetary value of the investment portfolio and wherein the first monetary value or greater is achieved in 50% or more of the simulated market return scenarios.

21. The method of claim 20, wherein a second possible future portfolio value of the plurality of the set of possible future portfolio values represents a second monetary value of the investment portfolio and wherein the second monetary value or greater is achieved in a greater number of the simulated market return scenarios than the first possible future portfolio value.

22. The method of claim 21, wherein the second possible future portfolio value or greater is achieved in 95% or more of the simulated market return scenarios.

23. The method of claim 21, wherein a third possible future portfolio value of the plurality of the set of possible future portfolio values represents a third monetary value of the investment portfolio and wherein the third monetary value or greater is achieved in fewer of the simulated market return scenarios than the first possible future portfolio value.

24. The method of claim 23, wherein the third possible future portfolio value or greater is achieved in 5% or fewer of the simulated market return scenarios.

25. The method of claim 19, further comprising providing a visual indication indicative of a probability of achieving the retirement income goal.

26. The method of claim 25, further comprising determining the probability of achieving the retirement income goal by evaluating the cumulative probability distribution that meets or exceeds the retirement income goal.

27. The method of claim 19, wherein the plurality of input values are received based on relative positioning of corresponding slider bar graphical input objects.

28. A computer system comprising

a storage device having stored therein one or more routines operable to provide an end user with feedback regarding a likelihood of an individual achieving a retirement income goal;

and

one or more processors coupled to the storage device and operable to execute the one or more routines, where

the one or more routines receive information regarding the retirement income goal of the individual;

the one or more routines receive a plurality of input values for corresponding decision variables, including an indication regarding a target retirement age for the individual, an indication regarding anticipated monetary contributions directed toward the retirement income goal and an express indication regarding the individual'"'"'s risk tolerance, upon which a probability distribution is dependent, the probability distribution generated based on simulated market return scenarios and representing a set of possible future portfolio values based on the plurality of input values;

the one or more routines provide the feedback in view of the plurality of input values by concurrently graphically presenting information regarding a plurality of the set of possible future portfolio values relative to a graphical indication of the retirement income goal;

the express indication regarding the individual'"'"'s risk tolerance is constrained by the one or more routines to be within a defined range of risk;

the individual'"'"'s risk tolerance represents the individual'"'"'s willingness to accept variance in the set of possible future portfolio values in view of expected returns of an investment portfolio of the individual that is associated with the retirement income goal; and

the plurality of the set of possible future portfolio values are representative samples of a cross section of the probability distribution corresponding to the plurality of input values.

29. The computer system of claim 28, wherein a first possible future portfolio value of the plurality of the set of possible future portfolio values represents a first monetary value of the investment portfolio and wherein the first monetary value or greater is achieved in 50% or more of the simulated market return scenarios.

30. The computer system of claim 29, wherein a second possible future portfolio value of the plurality of the set of possible future portfolio values represents a second monetary value of the investment portfolio and wherein the second monetary value or greater is achieved in a greater number of the simulated market return scenarios than the first possible future portfolio value.

31. The computer system of claim 30, wherein the second possible future portfolio value or greater is achieved in 95% or more of the simulated market return scenarios.

32. The computer system of claim 30, wherein a third possible future portfolio value of the plurality of the set of possible future portfolio values represents a third monetary value of the investment portfolio and wherein the third monetary value or greater is achieved in fewer of the simulated market return scenarios than the first possible future portfolio value.

33. The computer system of claim 32, wherein the third possible future portfolio value or greater is achieved in 5% or fewer of the simulated market return scenarios.

34. The computer system of claim 28, wherein the one or more routines are further operable to provide a visual indication indicative of a probability of achieving the retirement income goal.

35. The computer system of claim 34, wherein the one or more routines are further operable to determine the probability of achieving the retirement income goal by evaluating the cumulative probability distribution that meets or exceeds the retirement income goal.

36. The computer system of claim 28, wherein the plurality of input values are received based on relative positioning of corresponding slider bar graphical input objects.

40. The computer system of claim 28, wherein the defined range of risk comprises a feasible range of risk available to the individual based on a set of financial products that are available to be part of the investment portfolio.