Patent Application
20130090978
To achieve financial goals, individuals often create relationships with financial advisors. For example, each financial advisor employed or contracted by a financial advising enterprise may have one-to-one relationships with financial planning clients. Each financial advisor may regularly consult with his or her financial planning clients to help the clients achieve their stated financial goals. Financial planners may use computer systems to assist in the financial planning process.
As a financial advising enterprise grows, it may become increasingly difficult to monitor individual financial advisors. As a result, some financial advisors may use deprecated tools and techniques for a considerable amount of time before realizing that newer tools and techniques are available. In addition, when certain financial advisors engage in advising practices that violate enterprise policy or government regulations, such practices may not be systematically noticed and corrected.
Systems and methods of quantifying and evaluating risk associated with each financial advising relationship maintained by a financial advisor are disclosed. The financial advising relationships may be evaluated by applying risk assessment rules that are defined by an enterprise. For example, the risk assessment rules may be based on factors including, but not limited to, client age, client valuation, fee schedules, document delivery schedules, and geography. The evaluation process may be fully-automated, such that each financial advisor employed by an enterprise is selected for evaluation at least once during a review cycle (e.g., a calendar year). Alternately, or in addition, high-risk financial advisors may be manually selected or prioritized to be selected for evaluation more often than other financial advisors. The disclosed systems and methods may also provide feedback and remedial options. For example, financial advisors and their supervisors may be provided with feedback in the form of risk assessment reports. Financial advisors may also be provided with a list of recommended and/or mandatory remedial action items that are to be completed.
In a particular embodiment, a method includes, at a processor of a computing device, selecting a financial advisor from a plurality of financial advisors. The selected financial advisor has a plurality of financial advising relationships with a plurality of clients. The method also includes automatically evaluating the plurality of financial advising relationships based on a plurality of risk assessment rules. The method further includes computing a relationship risk score for each of the financial advising relationships.
In another particular embodiment, a system includes a processor and advisor selection logic executable by the processor to select a financial advisor from a plurality of financial advisors. The selected financial advisor has a plurality of financial advising relationships with a plurality of clients. The system also includes a rules engine executable by the processor to evaluate the plurality of financial advising relationships based on a plurality of risk assessment rules. The system further includes score determination logic executable by the processor to compute a relationship risk score for each of the financial advising relationships.
In another particular embodiment, a non-transitory computer-readable medium includes instructions that, when executed by a computer, cause the computer to select a first subset of financial advisors from a plurality of financial advisors during a first time period. Each financial advisor has a plurality of financial advising relationships with a plurality of clients. The instructions, when executed, also cause the computer to evaluate financial advising relationships of each financial advisor in the first subset of financial advisors based on a plurality of risk assessment rules. The instructions, when executed, further cause the computer to compute relationship risk scores for each of the financial advising relationships of each financial advisor in the first subset of financial advisors. The instructions, when executed, cause the computer to select a second subset of financial advisors from the plurality of financial advisors during a second time period. The instructions, when executed, also cause the computer to evaluate financial advising relationships of each financial advisor in the second subset of financial advisors based on the plurality of risk assessment rules. The instructions, when executed, further cause the computer to compute relationship risk scores for each of the financial advising relationships of each financial advisor in the second subset of financial advisors.
The computing device 110 may include or have access to one or more components that are operable to perform risk-based evaluation of financial advisors. For example, the components may be integrated into an application or tool that is executable by a processor of the computing device 110, where the application or tool is represented by instructions stored at a memory (not shown) of the computing device 110 that are executable by a processor (not shown) of the computing device 110. The computing device 110 may also include input and/or output devices (not shown). The application or tool may be accessible to corporate registered principals, field registered principals, and leaders, but may not be accessible to financial advisors. Components of the application or tool may include advisor selection logic 111 configured to select a plurality of advisors on whom to perform risk evaluation. For example, the advisor selection logic 111 may be configured to automatically and randomly select a subset of the financial advisors employed or contracted by a financial advising enterprise. In a particular embodiment the advisor selection logic 111 is configured to select a subset of financial advisors during each time period (e.g., month of the year), such that each financial advisor is selected at least once during a calendar year or other timeframe regardless of what risk assessment rules are fired for the financial advisor. The subsets of financial advisors may overlap or may be mutually exclusive. Alternately, or in addition, the advisor selection logic 111 may be configured to select financial advisors who have previously been identified as high-risk more often or earlier during the calendar year than low-risk advisors. For example, financial advisors operating in a high-risk geographic area (e.g., due to local laws or media exposure) may be selected more often than other financial advisors. An illustrative example of selecting subsets of financial advisors during a calendar year is further described with reference to
Each financial advisor may have a plurality of financial advising relationships with a corresponding plurality of financial planning clients. Data representing the financial advising relationships of financial advisors may be accessible to the computing device 110, as illustrated by the stored data 120. Types of financial advising relationships may include, but are not limited to, financial planning (FP) relationships and strategic portfolio service (SPS) relationships. It should be noted that a financial advisor may have multiple relationships with a single client. For example, a financial advisor may have both an FP relationship and an SPS relationship with a single client.
The computing device 110 may also store or have access to a plurality of risk assessment rules 112. The risk assessment rules 112 may be defined by the financial advising enterprise or employees thereof (e.g., by the supervisor 130 via illustrated supervisor input 132). Generally, at least some of the risk assessment rules 112 may represent policies that financial advisors (e.g., the financial advisor 140) are expected to follow. Alternatively, the risk assessment rules 112 may include one or more rules based on factors outside of a financial advisor's control.
The risk assessment rules 112 may be based on various factors. By way of example, and not limitation, the risk assessment rules 112 may include rules based on whether a client's age exceeds a client age threshold and whether a client's valuation (e.g., total net worth) exceeds a client valuation threshold. The risk assessment rules 112 may also include rules regarding fees and fee schedules associated with financial advisors. For example, the risk assessment rules 112 may include rules regarding whether a financial advisor is charging a client a fee that is greater than a maximum total fee threshold or is less than a minimum total fee threshold, or whether a financial advisor is charging a client more than one fee (e.g., one fee for a FP account associated with the client and another fee for an SPS account associated with the client). The risk assessment rules 112 may further include rules based on whether documents, such as financial plans, produced by a financial advisor are “late.” For example, such a rule may be violated when a financial advisor produces a financial plan later than promised to the client (e.g., after a date set in a service agreement agreed upon by the client) or later than when is acceptable under company policy (e.g., a policy indicating that updated financial plans are to be produced each quarter).
In a particular embodiment, each of the rules 112 has a corresponding point value. Illustrative examples of the risk assessment rules 112, and point values corresponding to each of the risk assessment rules 112, are further described with reference to
The computing device 110 may include a rules engine 113 that is operable to automatically evaluate financial advising relationships based on the risk assessment rules 112. For example, for each financial advisor in the subset of financial advisors selected by the advisor selection logic 111, the rules engine 113 may evaluate the financial advisor's relationships (as represented by the data 120) against the rules 112. The rules engine 113 may thus generate a list of rules fired against and violated by each financial advising relationship of each financial advisor selected by the advisor selection logic 111. In a particular embodiment, alerts may be generated when a rule is fired. For example, if the financial advisor 140 violates a rule 112 by charging the same fee to more than 50% of his or her financial planning clients, an alert may be generated. The alert may be provided to the supervisor 130 (e.g., registered principal). For example, a note may appear in an advisor information screen (e.g., the advisor information screen further described with reference to
The computing device may also include relationship score determination logic 114. The logic 114 may compute a relationship risk score for each financial advising relationship evaluated by the rules engine 113. For example, when each of the risk assessment rules is associated with a corresponding point value, the relationship risk score of a particular relationship may be equal to a sum of the point values associated with rules that are violated by the particular relationship. To illustrate, if a financial advisor has two relationships, and each relationship violates a rule worth three points, each relationship would have a relationship risk score of three.
The computing device 110 may further include action items logic 115. The action items logic 115 may determine, for each evaluated financial advisor, whether action item requests 142 are to be sent to the financial advisor 140 (i.e., to the computing device or workstation 141 associated with the financial advisor 140). To illustrate, the action items logic 115 may automatically (or in conjunction with input 132 from the supervisor 130) generate and transmit the action item requests 142 to the financial advisor 140 (or the workstation 141 associated therewith). Alternately, the determination whether or not to transmit such action item requests 142 may be performed by an entity that is separate from the computing device 110 (e.g., by a centralized supervision unit of an enterprise). In one example, the action item requests 142 may include pre-populated information regarding remedial actions, as further described with reference to
Each of the action item requests 142 may be associated with a remedial risk mitigation action that is recommended or required to be performed by the financial advisor 140. For example, if the financial advisor 140 has missed numerous deadlines, the financial advisor 140 may be transmitted an action item request requiring that the financial advisor review financial planning deadlines and calendar policies. Each of the action item requests 142 may also have an associated due date.
In a particular embodiment, a notification 134 indicating that the financial advisor 140 has been classified as high-risk may first be transmitted to the supervisor workstation 131. It will be noted that the action item request(s) 142 and the supervisor notification 134 are depicted using dashed lines in
During operation, the advisor selection logic 111 may select one or more financial advisors that will be subjected to risk-based evaluation. For example, the advisor selection logic 111 may select the financial advisor 140. The rules engine 113 may retrieve data 120 representing the various financial advising relationships of the financial advisor 140 and may evaluate the relationships based on the risk assessment rules 112. The relationship score determination logic 114 may determine which rules 112 fire for the selected financial advisor 140 and, in one example, may also compute risk scores for each financial advising relationship of the financial advisor 140. Depending on the results of the rules engine 113, the action item requests 142 and/or an e-mail notification indicating that the financial advisor 140 has been reviewed may be transmitted to the financial advisor workstation 141. As another option, reports that include advisor risk scores (individually or in aggregate) may be distributed periodically or in as-requested reports.
During operation of the system 100, various graphical user interfaces may be generated and/or displayed by the computing device 110 and the supervisor workstation 131. For example, an advisor review interface may be generated and displayed, as further described with reference to
It should be noted that although
The system 100 of
The advisor selection logic 220 may select, during each advisor review period, a subset of financial advisors to be reviewed. In a particular embodiment, the advisor selection logic 220 may divide the available universe of financial advisors into mutually exclusive, non-overlapping subsets. For example, the advisor selection logic 220 may divide the financial advisors into twelve subsets 201-212, where each subset of financial advisors is reviewed during a particular month of the year.
Alternately, or in addition, the advisor selection logic 220 may prioritize advisors that are deemed to be high-risk, associated with predetermined high-risk conditions, and/or have the potential to be high risk (e.g., due to the types of clients the advisors serve, the geographic region where the advisors are located, increased media visibility, etc.) for earlier or more frequent selection. For example, such high-risk financial advisors may be indicated in gray in
Thus, the advisor selection logic 220 of
In a particular embodiment, as illustrated in
To illustrate, the rules 300 include a first rule 301 indicating that if the age of a client associated with a relationship is greater than sixty, then the risk score for the relationship is to be incremented by 1 point. A second rule 302 indicates that if the financial advisor charges a client more than $10,000 in fees, then the risk score for the relationship is to be incremented by 4 points. A third rule 303 indicates that if the financial advisor has both a financial planning (FP) relationship and a strategic portfolio services (SPS) relationship with the client, then the risk score for the relationship is to be incremented by 4 points. It will be appreciated that the third rule 303 may fire for both the FP relationship and the SPS relationship, thus contributing a total of 8 points to the advisor's overall risk score. In an alternate embodiment, the rule 303 may fire for only one of the relationships and may contribute only 4 points.
A fourth rule 304 indicates that if the valuation (e.g., overall net worth, total money invested in accounts managed by the financial advisor, or some other valuation metric) of the client is greater than $5,000,000, then the risk score for the relationship is to be incremented by 3 points. A fifth rule 305 indicates that if the client resides in a particular geographic region (e.g., New Hampshire in
A seventh rule 307 indicates that if the financial advisor charges the client a fee that exceeds a fee schedule (e.g., a suggested, recommended, or approved fee schedule), then the risk score for the relationship is to be incremented by 2 points.
It should be noted that the various thresholds and specifics (e.g., 60 years of age, fees of $10,000, state of New Hampshire, etc.), as well as the point values and the differences in point values, depicted in
The method 400 may be performed by a processor of a computing device and may include selecting a financial advisor from a plurality of financial advisors, at 402. The selected financial advisor may have a plurality of financial advising relationships with respect to a corresponding plurality of clients. For example, in
The method 400 may also include automatically evaluating the plurality of financial advising relationships based on a plurality of risk assessment rules, at 404. For example, in
The method 400 may further include computing a relationship risk for each of the financial advising relationships, at 406. For example, in
The method 400 may include determining whether or not to send action item request(s) to the financial advisor, at 408. The determination may be automatic, at least partially based on user input (e.g., from a supervisor or a registered principal), or may be fully based on user input. When it is determined that the action item request(s) are not to be sent, the method 400 may include notifying the financial advisor that he/she has been reviewed and may return to 402 to evaluate other financial advisors.
When it is determined that the action item request(s) are to be sent, the method 400 may include transmitting at least one action item request to a computing device associated with the selected financial advisor, at 410. The at least one action item request may have an associated due date and may be associated with at least one risk mitigation action to be performed by the selected financial advisor. In a particular embodiment, the action item request(s) may be transmitted by a centralized supervision unit. Alternately, as illustrated in
In a particular embodiment, depending on the types of risk assessment rules triggered (e.g., rules violated by a financial advising relationship), information regarding the relationship may automatically be forwarded (e.g., by the action items logic 115 of
The method 500 may include selecting a first subset of financial advisors from a plurality of financial advisors during a first time period (e.g., a first month of a year), at 502. Each financial advisor may have a plurality of financial advising relationships with a plurality of clients. For example, in
The method 500 may also include evaluating financial advising relationships of each financial advisor in the first subset of financial advisors based on a plurality of risk assessment rules, at 504. For example, in
The method 500 may further include computing relationship risk scores for each of the financial advising relationships of each financial advisor in the first subset of financial advisors, at 506. For example, in
The method 500 may include selecting a second subset of financial advisors from a plurality of financial advisors during a second time period (e.g., a second month of a year), at 508. For example, in
The method 500 may also include evaluating financial advising relationships of each financial advisor in the second subset of financial advisors based on the plurality of risk assessment rules, at 510. For example, in
The method 500 may further include computing relationship risk scores for each of the financial advising relationships of each financial advisor in the second subset of financial advisors, at 512. For example, in
The method 500 may thus enable periodic risk-based evaluation of financial advisors and individual client advising relationships of the financial advisors. The method 500 of
As illustrated in
As illustrated in
In
The findings detail screen 800 may list the computed relationship risk score for each of John Smith's advising relationships and may also list the rules triggered by (e.g., rules determined to apply to) each relationship.
For example, as illustrated in
Further, the relationship with Jack Stewart is computed to have a relationship risk score of 10. The relationship with Jack Stewart triggered the rule DUAL (e.g., the third rule 303 of
In addition, the relationship with client Abraham Lennon has a relationship risk score of 1 due to the rule >AGE (e.g., the first rule 301 of
It will be appreciated that the graphical user interface screens illustrated in
Although the exemplary embodiments described herein are intended to enable a person skilled in the art to practice such embodiments, it should be understood that other embodiments may be realized and that logical and physical changes may be made without departing from the scope of the present disclosure. Thus, the detailed description herein is presented for purposes of illustration only and not for limitation.
For the sake of brevity, conventional data networking, application development and other functional aspects of the systems (and components of the individual operating components of the systems) may not be described in detail herein. Furthermore, the connecting lines shown in the various figures contained herein are intended to represent exemplary functional relationships and/or physical couplings between the various elements. It should be noted that many alternative or additional functional relationships or physical connections may be present in a practical system.
In one embodiment, portions of the present disclosure may be implemented using a system that includes a software module, logic engines, computer hardware, databases, and/or computer networks. Moreover, while the description may make reference to specific technologies, system architectures, and data management techniques, it will be appreciated that other devices and/or methods that use different technologies, architectures, or techniques may be implemented without departing from the scope of the disclosure. Similarly, while the description may make reference to web clients, personal computers, and servers, it will be appreciated that other embodiments may include implementations using point of service (POS) devices, kiosks, handheld devices such as personal digital assistants and cellular telephones, or other devices. This disclosure is intended to cover any and all subsequent adaptations or variations of various embodiments.
The provided Abstract is not intended to be used in interpreting or limiting the scope or meaning of the claims. In addition, the disclosure is not to be interpreted as indicating that the claimed embodiments require more features than are expressly recited in each claim. Thus, the present disclosure is not intended to be limited to the embodiments shown herein but is to be accorded the widest scope possible consistent with the principles and novel features as defined by the following claims.
