Note : Les descriptions sont présentées dans la langue officielle dans laquelle elles ont été soumises.
CA 02765820 2012-01-30
SYSTEM AND METMOD OF VALUATING AN INVESTMENT PORTFOLIO
[00011 The present disclosure is directed to the maintenance of an
investment
portfolio in compliance with an investment objective. Specifically, the
present disclosure
is directed to the maintenance of an investment portfolio created for an
investor based on
investment objectives by applying a diagnostic tool that facilitates
compliance with the
investment objectives by tracking the current state of the portfolio,
identifying areas that
are not in compliance and offering solutions to satisfying the investment
objectives.
[0002] It is known in the prior art to develop investment objectives
based on basic
financial information provided by an investor, which typically includes
information related
to investment goals, financial status, age, income, retirement goals, and
financial needs.
Investment goals are well known and may include preservation of capital,
aggressive
growth, balance and risk tolerance. Standard portfolio models are well known
to achieve
investment objectives and are normally presented in terms of a pie chart with
the asset
allocation portrayed as a piece of the pie. In its simplest form, the asset
allocation is
typically divided between individual financial instruments having different
classifications,
e.g., equity, bonds, cash or equivalents, etc. with a designated goal of
percentage for each
financial instrument being identified. Assets can then be acquired in
accordance with the
goals corresponding to the pie chart. Periodically, the portfolio is reviewed
and any
deviations from the allocation designated by the pie chart can be identified.
For example,
an investment objective may dictate an asset allocation of goal of 55% equity,
35% bonds,
and 10% cash can be reviewed periodically to ascertain the current market
value of the
assets to determine compliance with the investment goals. If the current
market value
indicates 47% equity, 43% bonds and 10%, prior art systems can identify the
deviation for
the investment goal. However, most prior art systems are manual in nature and
are thus
limited in providing a detailed solution and options to return the asset
allocation to comply
with the investment goals. Moreover, asset allocation based on asset type may
not provide
sufficient granularity to achieve the investment goals. These prior art
systems that rely
solely on asset allocation are one dimensional in that they do not drill down
further to the
individual financial instruments that make up the asset allocation.
[0003] A more sophisticated prior art model may use multiple accounts,
each
containing a different model allocation. Each of the different models can be a
component
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of a unified managed account (UMA) where individual account managers designate
the
investment criteria for the individual accounts, also known as investment
sleeves, and an
overlay manager assists in optimizing investment goals across the individual
accounts.
For example, in one prior art UMA system, the overlay manager assists with tax
harvesting across the individual accounts. If one account presents an
opportunity to
realize a gain, the overlay manager may identify a loss which presents a
beneficial
shielding of the gain. Typically, this type of tax harvesting is opportunistic
in the sense
that it optimizes the tax treatment across multiple accounts as they occur but
may not
assist in proactive investment planning.
10004] The use of models is problematic in that the evaluation is one
dimensional
in the sense that assets are typically tracked by their relative position with
respect to the
overall portfolio. There is limited ability to differentiate between assets in
an asset class.
For example a portfolio model may identify an asset class as a security
without regard to
the technology sector or the consumer discretionary sector corresponding to
the security.
A security in the high tech industry may behave much differently than a
security in the
hospitality industry. Typical prior art financial diagnostic tools can not
differentiate in a
specific asset class for differences in the characteristics of the individual
assets.
[00051 Applicant's co-pending application Ser. No. 12/869,529 provides
a detailed
method of building an investment portfolio by allocating assets among not only
asset
classes but also selecting specific financial instruments in specific sectors,
as well as
specific product types.
100061 The present disclosure is directed to a processor implemented
method of
monitoring of the asset allocation of a portfolio and includes a diagnostic
tool that not only
identify deviations from the portfolio objectives but provides greater
granularity than
afforded in the prior art by recommending specific transactions to return the
portfolio to
compliance with the portfolio objectives.
[0007] In one embodiment, the present disclosure can be utilized by a
financial
advisor in reviewing the investment portfolios of many clients to identify
portfolios that
may need to reallocate assets in order to meet the respective clients'
investment objectives.
Once these portfolios are identified, the financial advisor may utilize the
present disclosure
to prioritize the portfolios and recommend specific transactions in specific
financial
instruments to ensure compliance with the respective investment objectives.
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Brief Description of the Drawings
100081 FIG. 1 is a simplified flow diagram of one embodiment of the
present
disclosure.
[0009] FIGS. 2A-2D is a simplified pictorial representation of a diagnostic
report
generated using the embodiment of FIG. 1,
[00101 FIG. 3 illustrates one embodiment of a user interface showing
the use of the
present disclosure for evaluating a portfolio.
[0011] FIG. 4 illustrates one embodiment of a user interface showing
the use of the
present disclosure for evaluating a portfolio.
[0012] FIG. 5 illustrates one embodiment of a user interface showing
the use of the
present disclosure to invest additional money in the portfolio.
[0013] FIG. 6 illustrates one embodiment of a user interface showing
the results of
a diagnostic evaluation of a portfolio using the present disclosure.
[0014] FIG. 7A-B illustrates one embodiment of a user interface showing the
results of a diagnostic evaluation regarding "Sell Rated Securities".
[0015] FIG. 8 illustrates one embodiment of a user interface showing
the results of
a diagnostic evaluation of a portfolio using the present disclosure.
[0016] FIG. 9 illustrates one embodiment of a user interface showing
the options
generated as a result of a diagnostic evaluation of a portfolio using the
present disclosure.
[0017] FIG. 10 illustrates one embodiment of a user interface showing
portfolios
ranked in priority order generated as a result of a diagnostic evaluation of a
portfolio using
the present disclosure.
[0018] FIG. 11 illustrates one embodiment of a user interface showing
portfolios
ranked in priority order based on a single evaluation category generated as a
result of a
diagnostic evaluation of a portfolio using the present disclosure.
[0019] FIG. 12 illustrates one embodiment of a user interface showing
portfolios
that have recently been identified as not within suggested guidelines
generated as a result
of a diagnostic evaluation of a portfolio using the present disclosure.
[0020] FIG. 13 illustrates one embodiment of a user interface showing
portfolios
suitable for a specific asset generated as a result of a diagnostic evaluation
of a portfolio
using the present disclosure.
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Detailed Description
[00211 FIG. 1 illustrates one embodiment of the present disclosure
illustrating the
steps of a diagnostic tool. In step 100 an investment portfolio is received
for a customer.
The investment portfolio may include a plurality of assets and an investment
objective for
the portfolio. The assets may be represented by a plurality of financial
instruments. The
term "financial instrument" refers to an instrument representing equity
ownership, debt or
credit, typically in relation to a corporate or governmental entity, wherein
the instrument is
saleable, including without limitation, stocks, bonds, unit investment trusts
(UITs), mutual
funds, exchange traded funds (ETFs), money market funds, etc. Each investment
portfolio
may also include an investment objective that includes goals for each of the
financial
instruments. The investment objective may establish suggested guidelines
providing for
the percentage of each asset in various categories as compared to all assets,
or the
percentage of each specific financial instrument as compared to all other
financial
instruments. The investment objective can be used to identify corresponding
financial
instruments that are within recommended guidelines used by a particular
investment
advisor to achieve the investment objective of a particular client.
[00221 The investment portfolio may be a pre-existing portfolio as in
the case
when a client brings a portfolio to a financial advisor from another
investment firm or
advisor. In the alternative, the portfolio may be the result of a portfolio
created by the
advisor. For example, the portfolio may be created by the financial advisor
using the
systems and methods disclosed in co-pending and commonly owned Application
Ser. No.
12/869,529.
[00231 In Step 110, each asset can be categorized into at least one
evaluation
category. The evaluation categories can include "Asset Allocation",
"International",
"Niche", "Fixed-income ( Bond) Ladder", "Corporate Bond Diversification",
"Municipal
Bond Diversification", "Stock Sector Diversification", "Security Over
Concentration",
"Sell Rated". The above mentioned evaluation categories are but just one
example, and
many different evaluation categories can be selected. In addition, the present
disclosure
allows a multi-dimensional analysis of the portfolio by analyzing evaluation
categories
that are overlapping. For instance, the evaluation category "Asset Allocation"
will overlap
with the "International" category when international securities are held in
the portfolio.
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Likewise, the "Asset Allocation" category will overlap with the "Corporate
Bond
Diversification" category when corporate bonds are held in the portfolio.
[0024] Another multi-dimensional aspect not found in the prior art is
that the
evaluation categories can be hierarchical in nature. For example, for each of
the
evaluation categories discussed above, additional evaluation categories can be
directed the
financial instruments held in the category. For example, the "Asset
Allocation" evaluation
category can be further broken down to evaluation categories corresponding to
the
suitability categories of "Aggressive", "Growth", "Growth & Income", "Income",
"Aggressive Income & Cash." The use of sub-categories allows a more robust
evaluation
of the portfolio than the prior art one dimensional evaluation systems. For
example, an
investment objective of "Balanced Toward Growth" may have an asset allocation
of 65%
equities and 35% cash/income. In a prior art system, the portfolio would be
deemed to be
in compliance with the suggested guidelines if this 65/35 allocation was met.
However,
using the diagnostic tool of the present disclosure, this same portfolio may
be deemed to
be not in compliance if the "Aggressive" equities exceed a predetermined
threshold and
are over-concentrated with respect to the other equities, notwithstanding that
the portfolio
satisfies the 65/35 asset allocation.
[0025] Likewise, the "International" evaluation category can be
further broken
down to evaluation categories corresponding to "International Equity" and
International
Income." The "Niche", sometimes referred to as "non-core" assets, evaluation
category
can be further broken down to evaluation categories corresponding to
"Aggressive
Income", "Emerging Markets", "Natural Resources", and "Real Estate." The
"Fixed-
Income Ladder" evaluation category can be further broken down to evaluation
categories
corresponding to "Aggressive Income", "Emerging Markets", "Natural Resources",
and
"Real Estate." The "Corporate Bond Diversification" evaluation category can be
further
broken down to evaluation categories corresponding to industry sectors such as
"Financial", "Industrials", and "Utilities". The "Municipal Bond
Diversification"
evaluation category can be further broken down to evaluation categories
corresponding to
"General Obligation" and "Revenue" and subcategories of "Revenue" including
"Taxed
Back", "Utilities", "Transportation", "Education", "Health Care", and
"Housing." The
"Stock Sector" evaluation category can be further broken down to evaluation
categories
corresponding to industry sectors, including "Communications", "Utilities",
"Consumer
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Staples", "Energy", "Health Care", "Financial Services", "Industrials",
"Consumer
Discretionary" and "Technology."
[0026] Thus the present disclosure contemplates breaking down the
portfolio into
many overlapping "slices", equity vs. cash vs. income, (asset allocation), or
international
vs. domestic, or core vs. non-core, The present disclosure also contemplates a
breakdown
by style, .i.e., growth, blend value, large mid and small cap.
[0027] In step 120, thresholds can be established for each evaluation
category as a
function of the investment objective. For example, for an "Asset Allocation"
category for
a portfolio having a growth focused investment objective, the assets goals may
be 80%
equities and 20% cash/income. Each asset type may have multiple threshold
which
require different actions. For example, this portfolio may have a first tier
threshold for
equities at 83% and a second tier threshold for equities at 87%. Unlike in the
prior art, in
which an investment criteria was either satisfied or not, the present
disclosure uses
thresholds to establish how far from the criteria is the portfolio and for
selecting different
responses based on the thresholds.
[0028] In one embodiment, financial instruments may be assigned grades
or the
like that identify varying levels of suitability for investment. The
suitability categories can
be identified as "Aggressive", "Growth", "Growth & Income", "Income",
"Aggressive
Income & Cash", and each category can have a desired range based on the entire
portfolio.
The assets may have thresholds based on the suitability of the constituent
financial
instruments included in the assets. For example, the equity assets may have
threshold
corresponding to the suitability classification of the financial instruments
such as
"Aggressive" threshold established to be 0-2% over the suggested guidance, a
"Growth"
threshold established to be 0-4% over the suggested guidance and a "Growth &
Income"
threshold established to be 0-5% over the suggested guidance. The thresholds
for a given
financial instrument may also be tiered such that a first tier threshold for
"Aggressive"
instruments is 0-2% over the suggested guidance and a second tier threshold is
>3% over
the suggested guidance.
[0029] Thus, a threshold can be established using a percentage of the
total
portfolio as a function of the investment objective of the portfolio. In
addition, tiered
thresholds can be used to indicate the relative deviation of an asset from the
suggested
guidance provided by the investment objective, e.g., when the asset allocation
is deemed
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to be slightly outside or definitely outside the recommended guidelines used
by the
investment advisor to meet the client's investment objective. For income/cash
assets,
separate thresholds can be established for cash and income. The thresholds can
indicate
when the Asset Allocation is above or below suggested guidelines for the
investment
objective.
[0030] For the evaluation category of "International Investments", a
threshold may
be established for the percentage of domestic investments as compared to
international
investments. Another threshold may be the amount of diversification between
International Income and Equity investments. Multiple thresholds may be used
to indicate
when the international investments are either slightly outside, or definitely
outside
suggested guidelines for the investment objective.
[0031] For the "Security Overconcentration" category, a threshold may
be
established to highlight when a portfolio is over concentrated in a security.
Different
threshold levels may be selected to identify the level of overconcentration,
e.g., slightly
over concentrated as compared to definitely over concentrated.
[0032] For the "Fixed Income Ladder" evaluation category, thresholds
may be
established as a function of the maturity dates of the bonds held in the
portfolio. For
example thresholds can be established so that bond maturities are spread
across short,
intermediate and long term to balance the risks of price swings.
[0033] For the "Corporate Bond Diversification" evaluation category,
thresholds
may be established which indicate overconcentration in a bond sector. Three
main bond
corporate bonds sectors may be financial services, utilities and industrials.
The thresholds
can be set to identify overconcentration in any of the sectors.
[0034] For the "Municipal Bond Diversification" evaluation category,
thresholds
may be established to indicate diversification between general obligation
bonds and
revenue bonds. Further thresholds may be established to diversify revenue
bonds by
sector.
[0035] For the "Stock Sector Diversification" evaluation category,
thresholds can
be established to indicate diversification between industry sectors. Industry
sectors for
stocks may be communications, utilities, consumer staples, energy, health
care, financial
services, industrials, consumer discretionary and technology.
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[0036] For the "Sell Rated" evaluation category, a threshold may be
set to indicate
ownership of a stock, bond, mutual fund or ETF that is subject to a sell
recommendation.
[00371 For the "Niche Investment" evaluation category, a threshold can
be
established to indicate diversification between non-core assets such as
Aggressive income
investment products, Emerging Markets investment products, Natural Resources
investment products and Real Estate investment products.
100381 In step 130, the market value of each asset in the portfolio
can be
determined. For example. the market value of each financial instrument can be
determined based on its then available current market price.
100391 In step 140, each asset is classified as a function of the current
market value
and the established thresholds for each category. For example, the
classification for a
category may indicate that the investments are within the recommended
guidelines. If the
investments are within the recommended guidelines, no further action is
required for that
category. Another classification may be that the investments for the category
are slightly
outside the recommended guidelines because a first threshold is exceeded. If
the
investments are slightly outside the guidelines, further action may not be
necessary
depending on the particular facts and circumstances, but an alert can be
provided to
prompt the user to take action if desired. Another classification can be that
the investment
definitively falls outside the recommended guidelines when a second tier
threshold is
surpassed. Under this classification, the investments holdings may put
compliance with
the investment objective in jeopardy. The classification of the categories are
exemplary
and further classifications based on further thresholds can be utilized if
desired. The
classifications of the categories can be displayed to the user using a
graphical user
interface and the classifications may be represented by a numerical system
,e.g, 1,2,3, a
color coded system, e.g., red, yellow, green, and an alphabetical system e.g.,
A, B and C
and the like.
100401 In step 150, assets which are classified as not within
suggested guidelines
can be selected to evaluate options for returning them to within guidelines.
[0041] In Step 160, options can be generated that return the asset to
within the
guidelines. For example, if the asset allocation is not within guidelines due
to the
"Aggressive" equities in excess of a threshold, the present disclosure can
identify options
to reduce the relative holdings of the "Aggressive" equities. For example, an
option may
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be to sell some of the financial instruments in the "Aggressive" equity
category. Another
option could be to purchase financial instruments in the income asset class to
reduce the
relative position of the "Aggressive" equities. Thus a transaction in one
asset class can be
identified to solve a potential problem in another asset class.
3 [0042] By evaluating all of the evaluation categories for assets
not within the
guidelines, a number of options can be presented to return the portfolio to
the suggested
guidelines in order to achieve the investment objective. In some cases,
execution of a
transaction for one evaluation category may impact another. For example, in a
scenario
where a cash position is larger the suggested guidelines, the cash can be used
to purchase
equities to bring the portfolio back within the suggested guidelines. The
identified
transaction options may also be based on research available to the financial
advisor. For
example, in the case where the "Asset Allocation" evaluation indicates that
the amount of
equities is below the suggested guidelines for the investment objection, the
financial
advisor can be presented with recommended stocks that are eligible for
inclusion in the
portfolio in view of the portfolio objective.
[0043] In step 170, the available transaction options can be presented
to the client
for the client to make a determination of which options to execute.
[0044] Thus, through the use of thresholds and classifications, each
evaluation
category can provide a quick indication of whether the category is within
guidelines, and
if not, how far it is from the guidelines. Moreover the present disclosure can
provide
options to return the assets in the evaluated category to within guidelines.
[0045] FIGS. 2A-2D illustrate one embodiment of a report that can be
generated
using the diagnostic method of the present disclosure. With reference to FIG
2A, a
portfolio diagnostic report can be generated by a financial advisor 210 to
evaluate the
current status of an investment portfolio of a client 220. The investment
portfolio can be a
portfolio created by the financial advisor 210, or can be a pre-existing
portfolio that is
currently being handled by the financial advisor. The investment portfolio has
an
investment objective 230 of "Balanced Toward Growth", which in this embodiment
may
be subject to suggested guidelines of 65% equities and 35% cash/income. The
total
portfolio value 240 indicates the value of the portfolio held at the firm of
the financial
advisor, as well as at other firms.
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(0046] The summary includes each of the evaluation categories 250, as
well as the
classification 260 of the evaluation category. In this embodiment, a green
circle indicates
the category is within suggested guidelines, a yellow triangle indicates the
category is
slightly outside suggested guidelines and a red square indicates the category
is well
outside the suggested guidelines. Each evaluation category 250 is then
described in more
detail in individual sections.
[00471 The "Asset Allocation" category 270 is generally indicated to
be well
outside the suggested guidelines as indicated by the red square 280. The
financial
instruments that make up the assets, characterized by their suitability, can
be displayed
with an indication of whether the financial instruments concentrations are
within the
suggested guidelines and whether any action is necessary. In this embodiment,
the
suggested concentration guideline 272 for "Aggressive" equities 274 is 5%.
Based on the
market value of the equities, the actual concentration 276 is 3%. Although the
"Aggressive" equities is 2% less than the guidelines, it is not greater than a
threshold
established for the "Aggressive" equities and thus no action is recommended
for the
"Aggressive" equities. With respect to the "Growth" equities, the actual
concentration
276 is 6% less than the suggested guideline 272. Because this difference 278
is greater
than a first tier threshold for "Growth" equities, this equity is classified
as slightly below
the suggested guideline as indicated by the yellow triangle 284. The first
tier threshold for
"Growth" equities in this embodiment is >4% from the guidelines, and the
second tier
threshold is >10%.
[0048] The "Growth & Income" equities actual concentration 276 is 22%
less than
the suggested guideline 272. Because this difference 278 is greater than a
second tier
threshold for "Growth & Income" equities, this equity is classified as well
below the
suggested guideline as indicated by the red square 294. The first tier
threshold for
"Growth & Income" equities in this embodiment is >4% from the guidelines, and
the
second tier threshold is >10%.
[0049] As a result of the evaluation of the equity portion of the
portfolio, the
"Total Equity" 296 is 30% less than the suggested guideline 272 and because
the
difference 278 is greater than a second tier threshold, the "Total Equity" is
classified as
well below the suggested guidelines and is indicated by a red square 298.
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[0050] A similar evaluation can be done for the "Cash/Income" assets
297. The
net result is that the "Asset Allocation" 270 is indicated to be well below
the suggested
guidelines as indicated by the red square 280.
[0051] With reference to FIG. 2B, a similar evaluation is done for
"International"
222, "Niche" 232 and "Bond Ladder" 242 assets. Each of the categories has an
actual
concentration 224, guideline concentration 226, difference 228 between the
actual and
suggested and associated thresholds (not shown) for each of the financial
instruments
included in the category. Based on a comparison of the difference 228 with the
appropriate thresholds, each category 222, 232 and 242 can be classified.
[0052] With reference to FIG. 2C, a similar evaluation is done for
"Corporate
Bond Diversification" 252, "Muni Bond Diversification" 262 and "Stock Sector
Diversification" 264 assets. For "Corporate Bond Diversification" 252, an
actual
concentration 254, guideline concentration 256, difference 258 between the
actual and
suggested and associated thresholds (not shown) is indicated for each of the
financial
instruments included in the category.
[0053] With respect to "Mimi Bond Diversification" 262 and "Stock
Sector
Diversification" 264 assets, the suggested guidelines 266 provide a range and
the
difference 268 is determined to be above or below the guideline range. The
appropriate
thresholds are selected based on the guideline range.
[0054] FIG. 2D provides the diagnostics results for the "Security
Overconcentration" 211 and "Sell-rated Securities" 213 categories. Unlike the
other
categories, the "Security Overconcentration" 211 and "Sell-rated Securities"
213 identify
the specific financial instruments that do not satisfy the suggested
guidelines.
[0055] FIG. 3 illustrates one embodiment of a user interface
illustrating a portfolio
that can be evaluated using the present disclosure. The portfolio investment
objective 300
is identified as Balanced Toward Growth. The portfolio consists of several
accounts 320,
each having a respective suitability category(ies) 330. The diagnostic tool
can be run to
evaluate the portfolio as a whole, or can be run to evaluate an individual
account, or subset
of accounts. In the case where the diagnostic tool indicates that the
investment objective
is not being met, and the client is comfortable with the current holdings, the
investment
objective can be selected from a pull-down menu 310 to more accurately reflect
the
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client's current investment strategy, and the diagnostic tool can be re-run
using the new
investment objective and the respective threshold for that objective.
[0056] Once the evaluation is complete, the diagnostic tool can
identify options to
return each of the evaluation categories to the suggested guidelines. FIG. 4
illustrates one
embodiment a user interface illustrating a portfolio that can be evaluated
using the present
disclosure. In response to the diagnostic results, a client may wish to add
money to his
account to address any deficiencies identified by the portfolio diagnostics. A
client can
indicate that it will add new money 400, and can specify which account it will
be adding
the new money to 420.
[0057] FIG. 5 illustrates how the new money added can be allocated to the
assets
in the portfolio instruments. For the selected account, the mix of assets is
listed 500, and
also illustrated in chart form 510. The current allocation 520 can be shown in
value and
allocation percentage, and illustrated in charts 510 and 530. The amount to
invest is
shown 540 and selectable amounts can be designated 550 for each of the types
of financial
instruments making up the assets of the account. As the money is allocated,
the new
allocation is indicated 560.
[0058] FIG. 6 illustrates how the asset allocation can be adjusted in
response to the
results provided by the portfolio evaluation. Each evaluation category which
is found to
not be in compliance with the suggested guidelines can be highlighted using a
selectable
guideline. In this embodiment, four categories are identified, "Sell Rated",
"Stock
Sectors", "Over Concentration" and "Aggressive Assets" as not within suggested
guidelines 600. By selecting one of the identified icons, the user interface
will provide
access to the options identified to bring the selected category back into
compliance with
the guidelines.
[0059] FIG. 7A illustrates the options identified for the "Sell Rated"
securities
category. In this embodiment, two equities 700 and two bonds 710 are
identified as being
held in various accounts 720 in the portfolio that according to current
research are sell
rated. The amount of each of the assets to be sold is selectable on an
individual basis 730,
or all can be selected to be sold 740.
[0060] FIG 7B illustrates the "Sell All Shares" option 740 being chosen.
The new
allocation reflecting the sold shares will be updated 750, and the amount of
money from
the proceeds of the sale available to be invested is indicated 760, and is
selectable between
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stocks and bonds. Once the options for "Sell Rated Securities" is chosen, the
diagnostic
tool can be rerun to account for the sale of the securities, which may impact
the previous
results presented in FIG 6.
[0061] FIG. 8 illustrates the results of selecting options presented
by the diagnostic
process which may result in additional money being available to invest in the
portfolio
800. Each of the icons represents an amount of money available to invest and
is selectable
and adjustable between categories.
[0062] FIG. 9 illustrates options presented when the "Stocks" icon of
FIG. 8 is
selected. Each of the stocks identified 900 are the results of research
recommendations
910 and are suitable for the portfolio in accordance with the investment
objective, and the
curient allocation of each is shown 930. The amount of money available 920 can
be
allocated as desired among any of the options 940. The new allocation will be
shown
representing the selection 950. In order to assist the selection, charts may
be provided
showing the impact on allocation. A box 970 can represent the suggested
guidelines, and
the bar 972 can represent the current allocation. Any allocation not within
the guidelines
can be highlighted 975, which may assist in the selection process.
[0063] FIGS. 2A-2D illustrate how the diagnostic model can be
implemented for a
single portfolio. In another embodiment, the present disclosure can be used to
periodically
review a plurality of portfolios. As illustrated in FIG. 10, for each
portfolio 1000, the
classification of the evaluation categories 1010 an be scored according to its
classification,
i.e., a higher score the greater the threshold is exceeded. By totaling the
scores of each
evaluation category, a portfolio can receive a cumulative score. Each
portfolio can then be
ranked by its cumulative score 1000, with the portfolios having the highest
score
indicating the highest deviation from their respective investment objective.
In this way,
the portfolios in greater need for review are highlighted for the financial
advisors and
resources can be directed to the portfolios in most need first.
[0064] In another embodiment, review of a single evaluation category
can be
carried out for many portfolios, and by using a scoring system, it can be
determined which
portfolios deviate the greatest from the guidelines for a specific evaluation
category. With
respect to FIG. 11, the diagnostic tool can score individual evaluation
categories and rank
the portfolios based on individual category. In this embodiment, each
portfolio can have
its "Asset Allocation" 1110 evaluation category scored, and the portfolios can
be ranked
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according to score and presented showing the portfolios having the worst
compliance with
this category 1120.
[0065] In another
embodiment, an alert can be issued based on an amount of time
that a portfolio exceeds a suggested guideline. For example, a processor can
store the
results from the diagnostic tool in a memory means. On a subsequent evaluation
of the
portfolio, the memory means can provide access to the stored data to analyze
trends in the
data. One trend may be the amount of time that an evaluation category or an
asset has
exceeded a threshold.
[00661 In another
embodiment, an alert can be generated and issued automatically
to the financial advisor, his supervisor or the client upon the occurrence of
an evaluation
category or an asset exceeding a threshold. With respect to FIG, 12, a listing
of all
portfolios which were previously in compliance but now are out of compliance
1200 can
be generated sorted by priority 1210.
[0067] The
diagnostic tool can also be used to find candidate portfolios for assets
that may be available. With reference to FIG 13, the financial advisor's firm
may have
bonds for Georgia Power in inventory 1300. The diagnostic tool can be used to
search for
portfolios which may be suitable for these assets. For example, a search can
be conducted
for portfolios that are underweight in the income category by a selectable
amount 1310,
underweight in the bond sector 1320, and underweight by maturity 1330. The
diagnostic
tool can search for all portfolios that meet this criteria and provide a list
of candidate
portfolios ranked in order of need 1340. Thus the diagnostic tool of the
present disclosure
can be used proactively to identify portfolios that may benefit from assets
that are
available to the financial advisor.
[0068] The present
disclosure can be implemented by a general purpose computer
programmed in accordance with the principals discussed herein. It may be
emphasized
that the above-described embodiments, particularly any "preferred"
embodiments, are
merely possible examples of implementations, merely set forth for a clear
understanding
of the principles of the disclosure. Many variations and modifications may be
made to the
above-described embodiments of the disclosure without departing substantially
from the
spirit and principles of the disclosure. All such modifications and variations
are intended
to be included herein within the scope of this disclosure and the present
disclosure and
protected by the following claims.
14
CA 02765820 2012-01-30
[0069] Embodiments of the subject matter and the functional operations
described
in this specification can be implemented in digital electronic circuitry, or
in computer
software, firmware, or hardware, including the structures disclosed in this
specification
and their structural equivalents, or in combinations of one or more of them.
Embodiments
of the subject matter described in this specification can be implemented as
one or more
computer program products, i.e., one or more modules of computer program
instructions
encoded on a tangible program carrier for execution by, or to control the
operation of, data
processing apparatus. The tangible program carrier can be a computer readable
medium.
The computer readable medium can be a machine-readable storage device, a
machine-
readable storage substrate, a memory device, or a combination of one or more
of them.
100701 The term "processor" encompasses all apparatus, devices, and
machines for
processing data, including by way of example a programmable processor, a
computer, or
multiple processors or computers. The processor can include, in addition to
hardware,
code that creates an execution environment for the computer program in
question, e.g.,
code that constitutes processor firmware, a protocol stack, a database
management system,
an operating system, or a combination of one or more of them.
100711 A computer program (also known as a program, software, software
application, script, or code) can be written in any form of programming
language,
including compiled or interpreted languages, or declarative or procedural
languages, and it
can be deployed in any form, including as a standalone program or as a module,
component, subroutine, or other unit suitable for use in a computing
environment. A
computer program does not necessarily correspond to a file in a file system. A
program
can be stored in a portion of a file that holds other programs or data (e.g.,
one or more
scripts stored in a markup language document), in a single file dedicated to
the program in
question, or in multiple coordinated files (e.g., files that store one or more
modules, sub
programs, or portions of code). A computer program can be deployed to be
executed on
one computer or on multiple computers that are located at one site or
distributed across
multiple sites and interconnected by a communication network.
[00721 The processes and logic flows described in this specification
can be
performed by one or more programmable processors executing one or more
computer
programs to perform functions by operating on input data and generating
output. The
processes and logic flows can also be performed by, and apparatus can also be
implemented as, special purpose logic circuitry, e.g., an FPGA (field
programmable gate
array) or an ASIC (application specific integrated circuit).
[0073] Processors suitable for the execution of a computer program
include, by
way of example, both general and special purpose microprocessors, and any one
or more
processors of any kind of digital computer. Generally, a processor will
receive
instructions and data from a read only memory or a random access memory or
both. The
essential elements of a computer are a processor for performing instructions
and one or
more memory devices for storing instructions and data. Generally, a computer
will also
include, or be operatively coupled to receive data from or transfer data to,
or both, one or
more mass storage devices for storing data, e.g., magnetic, magneto optical
disks, or
optical disks. However, a computer need not have such devices. Moreover, a
computer
can be embedded in another device, e.g., a mobile telephone, a personal
digital assistant
(PDA), a mobile audio or video player, a game console, a Global Positioning
System
(GPS) receiver, to name just a few.
[0074] The following represent non-limiting examples of embodiments of the
invention disclosed herein.
[0075] Example 1. A computer implemented diagnostic method for
evaluating an
investment portfolio comprising: a. electronically receiving an investment
portfolio for a
client, the investment portfolio including a plurality of types of assets and
at least one
investment objective for the portfolio wherein the investment objective
identifies the
percentage of each asset type in the portfolio; b. selecting for each asset of
the plurality of
assets more than one evaluation category, wherein each evaluation category
identifies
criteria to be used to evaluate each asset; c. by a computer processor,
establishing a
plurality of thresholds for each evaluation category; d. determining the
market value for
each of the assets in the portfolio; e. by the computer processor, classifying
each
evaluation category as a function of an amount of deviation of the evaluation
category
from the established thresholds; f. providing a visual display of each
evaluation category
and identifying its classification; g. receiving a selection of a displayed
evaluation
category; h. by the computer processor, for the selected displayed evaluation
category,
identifying at least one transaction to perform that will change the
classification of the
selected displayed evaluation category; i. receiving a selected transaction
from the at least
one identified transaction to perform; and j. executing the selected
transaction.
16
Date Recue/Date Received 2020-04-16
[0076] Example 2. The method of Example 1 wherein the assets include
at least
one of stocks, cash, bonds, unit investment trusts (UITs), mutual funds,
exchange traded
funds (ETFs), and money market funds.
[0077] Example 3. The method of Example 1 further comprising the steps
of: k.
providing a user interface to display the selected transaction to a user; and
1. receiving
instructions via the user interface to execute the transaction.
[0078] Example 4. The method of Example 1 wherein the plurality of
thresholds
includes a concentration of an individual asset as compared to all assets held
in the
portfolio.
[0079] Example 5. The method of Example 1 wherein the plurality of
thresholds
includes an industry sector allocation.
[0080] Example 6. The method of Example 5 wherein the industry sectors
include
communications, utilities, consumer staples, energy, health care, financial
services,
industrials, consumer discretionary and technology.
[0081] Example 7. The method of Example 1 wherein the step of classifying
includes determining a difference between an actual concentration of an asset
and a
suggested guideline.
[0082] Example 8. The method of Example 7 where the step of
classifying
includes comparing the determined difference with the plurality of thresholds.
[0083] Example 9. The method of Example 1 wherein the step of selecting a
displayed evaluation category includes selecting a displayed evaluation
category that
exceeds a threshold.
[0084] Example 10. The method of Example 3 wherein the execution of
the
selected transaction includes returning an asset to satisfy a suggested
guideline.
[0085] Example 11. The method of Example 10 wherein the selected
transaction is
for an asset not associated with the selected displayed evaluation category.
[0086] Example 12. A computer program product for evaluating an
investment
portfolio, the computer program product comprising a computer usable non-
transitory
medium having computer readable program code modules embodied in said medium,
wherein the computer readable program code modules are executable by a
computer
processor to perform a diagnostic evaluation of an investment portfolio, the
computer
readable program code modules comprising: a computer readable first program
code
17
Date Recue/Date Received 2020-04-16
module for receiving an investment portfolio for a client, the investment
portfolio
including a plurality of types of assets and at least one investment objective
for the
portfolio wherein the investment objective identifies the percentage of each
asset type in
the portfolio; a computer readable second program code module for categorizing
each
.. asset of the plurality of assets into more than one evaluation category,
wherein each
evaluation category identifies criteria to be used to evaluate each asset; a
computer
readable third program code module for establishing a plurality of thresholds
for each
evaluation category; a computer readable fourth program code module for
determining a
market value for each of the assets in the portfolio; a computer readable
fifth program
code module for classifying each evaluation category as a function of an
amount of a
deviation of the evaluation category from the established thresholds; a
computer readable
sixth program code module for providing a visual display of each evaluation
category and
identifying its classification; a computer readable seventh program code
module for
receiving a selection of a displayed evaluation category; a computer readable
eighth
program code module for identifying at least one transaction for the selected
displayed
evaluation category, performable to change at least one classification of the
selected
displayed evaluation category; a computer readable ninth program code module
for
receiving a selection of an identified transaction to perform; and a computer
readable tenth
program code module for executing the selected transaction.
[0087] Example 13. The computer program product of Example 12 wherein the
evaluation categories include at least two of asset allocation, international,
niche, fixed-
income ladder, corporate bond diversification, municipal bond diversification,
stock sector
diversification, security over concentration, and sell rated.
[0088] Example 14. A system for evaluation an investment portfolio
comprising: a
memory for storying computer readable code; and a processor operatively
coupled to the
memory, the processor configured to: receive an investment portfolio for a
client, the
investment portfolio, wherein the investment objective identifies criteria to
be used to
evaluate each asset; establish a plurality of thresholds for each evaluation
category;
determine a market value for each of the assets in the portfolio; classify
each evaluation
category as a function of an amount of a deviation of the evaluation category
from the
established thresholds; provide a visual display of each evaluation category
and
identifying its classification; receive a selection of a displayed evaluation
category;
18
Date Recue/Date Received 2020-04-16
identify at least one transaction to perform that will change the
classification of the
selected displayed evaluation category; receive a selection from the
identified transaction
to perform; and execute the identified transaction.
[0089] Example 15. The system of Example 14 further comprising: a user
interface
to display the at least one transaction to a user, and to receive instructions
to execute the at
least one transaction from the user.
[0090] Example 16. The system of Example 14 wherein the plurality of
thresholds
includes a concentration of an individual asset as compared to all assets held
in the
portfolio.
[0091] Computer readable media suitable for storing computer program
instructions and data include all forms of non volatile memory, media and
memory
devices, including by way of example semiconductor memory devices, e.g.,
EPROM,
EEPROM, and flash memory devices; magnetic disks, e.g., internal hard disks or
removable disks; magneto optical disks; and CD ROM and DVD-ROM disks. The
processor and the memory can be supplemented by, or incorporated in, special
purpose
logic circuitry.
[0092] To provide for interaction with a user, embodiments of the
subject matter
described in this specification can be implemented on a computer having a
display device,
e.g., a CRT (cathode ray tube) or LCD (liquid crystal display) monitor, for
displaying
information to the user and a keyboard and a pointing device, e.g., a mouse or
a trackball,
by which the user can provide input to the computer. Other kinds of devices
can be used
to provide for interaction with a user as well; for example, input from the
user can be
received in any form, including acoustic, speech, or tactile input.
[0093] Embodiments of the subject matter described in this
specification can be
implemented in a computing system that includes a back end component, e.g., as
a data
server, or that includes a middleware component, e.g., an application server,
or that
includes a front end component, e.g., a client computer having a graphical
user interface or
a Web browser through which a user can interact with an implementation of the
subject
matter described is this specification, or any combination of one or more such
back end,
middleware, or front end components. The components of the system can be
interconnected by any form or medium of digital data communication, e.g., a
19
Date Recue/Date Received 2020-04-16
communication network. Examples of communication networks include a local area
network ("LAN") and a wide area network ("WAN"), e.g., the Internet.
[0094] The computing system can include clients and servers. A client
and server
are generally remote from each other and typically interact through a
communication
network. The relationship of client and server arises by virtue of computer
programs
running on the respective computers and having a client-server relationship to
each other.
[0095] While this specification contains many specifics, these should
not be
construed as limitations on the scope of any invention or of what may be
claimed, but
rather as descriptions of features that may be specific to particular
embodiments of
particular inventions. Certain features that are described in this
specification in the
context of separate embodiments can also be implemented in combination in a
single
embodiment. Conversely, various features that are described in the context of
a single
embodiment can also be implemented in multiple embodiments separately or in
any
suitable subcombination. Moreover, although features may be described above as
acting
in certain combinations and even initially claimed as such, one or more
features from a
claimed combination can in some cases be excised from the combination, and the
claimed
combination may be directed to a subcombination or variation of a
subcombination.
[0096] Similarly, while operations are depicted in the drawings in a
particular
order, this should not be understood as requiring that such operations be
performed in the
particular order shown or in sequential order, or that all illustrated
operations be
performed, to achieve desirable results. In certain circumstances,
multitasking and parallel
processing may be advantageous. Moreover, the separation of various system
components
in the embodiments described above should not be understood as requiring such
separation
in all embodiments, and it should be understood that the described program
components
and systems can generally be integrated together in a single software product
or packaged
into multiple software products.
[0097] Those skilled in the art will appreciate that the present
invention can be
practiced by other than the described embodiments, which are presented for the
purposes
of illustration and not of limitation, and the present invention is limited
only by the claims
which follow.
Date Recue/Date Received 2020-04-16
