Portfolio reconciler module for providing financial planning and advice

Abstract

The present invention provides systems and methods for facilitating financial advising and planning for a user using a portfolio reconciler module. In accordance with an exemplary embodiment of the present invention, the system includes a portfolio integration module for facilitating integration of a user's goals, assets, savings, and risk tolerance to facilitate analyzing and developing a customized strategy for financial portfolio planning of the user. A portfolio reconciler module in communication with the portfolio integration module facilitates comparison of the customized strategy to other strategies and projected user financial decisions in order to further facilitate the financial portfolio planning of the user. A stochastic modeling module in communication with the portfolio integration module and the portfolio reconciler module for facilitating use of data from the portfolio integration module and the portfolio reconciler module in a stochastic modeling analysis using a synchronous stationary bootstrap sampling method to facilitate creation of a proposed situation portfolio for the user. A simulator module in communication with the portfolio integration module, the portfolio reconciler module, and the stochastic modeling module for facilitating forecasting 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.

Description

FIELD OF INVENTION The present invention relates generally to financial planning and advice systems and, more specifically, to financial planning and advice systems using stochastic modeling with a stationary bootstrap sampling method to model a user's financial situation. BACKGROUND OF THE INVENTION Achieving personal financial objectives generally includes a long-term relationship with a trusted and knowledgeable financial advisor who can assist with periodic financial planning. A financial advisor who is able to develop these types of relationships and meet a client's need for periodic financial planning thereby facilitates client retention. Inaccurate consumer impressions that financial planning is a once in a lifetime event should be mitigated in order to facilitate advisor-client relationships and accurately assess the client's current financial position as well as their future direction. An initial evaluation of a client's financial situation, followed by periodic reevaluat...

AI Technical Summary

Benefits of technology

"The present invention provides a system and method for probability modeling to help financial advisors and planners create customized strategies for their clients. The system includes a portfolio integration module to analyze and develop the strategy, a portfolio reconciler module to compare the strategy to other strategies and projected financial decisions, and a stochastic modeling module to create a proposed situation portfolio for the client using data from the previous modules. A simulator module can also be used to test and monitor the system over time. Overall, the invention helps financial advisors better understand and analyze clients' financial situations and create more effective financial plans."

Problems solved by technology

However, consumers of financial advice are becoming increasingly sophisticated and are, therefore, demanding more complete services from financial service companies and advisors.

These conventional applications are unsatisfactory in several regards.

Existing model portfolio engines do not adequately blend short-term and long-term needs to arrive at a client's recommended portfolio.

Conventional applications often fail to provide a current list of available products within the application that are directed to specific consumer needs.

Furthermore, these applications do not offer an adequate proposed investment strategy for the client.

Current financial planning tools usually provide deterministic illustrations (which may foster a false sense of certainty).

Moreover, existing financial applications often provide stochastic modeling only of retirement goals and do not normally present stochastic models addressing lifetime cash flow, disability, long-term care, and death, for example.

Finally, current applications do not offer personalized quality financial advice that is consistent with industry standards and tailored to the client's individualized needs.

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