MXPA00000719A - System for providing investment advice and management of pension assets - Google Patents

Abstract

An system and method for a data processor implemented system monitor (10) for enabling individual employee participants (14) to access independent professional money management for their Benefit Plan assets adapted to separate the investment management functions and fees thereof from the participant advice function and the fees thereof. The system and method provides professional asset allocation advice services (12) to individual participants (14) of Benefit Plans for allocating their account balances in a Trust (20, 22, 24, or 26) specifically tailored to their individual risk tolerances and retirement funding needs. A worksheet (40) is used to elicit the information necessary for the investment advisor (32) to recommend the Trust (20, 22, 24, or 26) appropriate for each individual participant (14). Each Trust (20, 22, 24, 26) holds shares in a plurality of mutual funds in varying proportions.

Description

SYSTEM TO PROVIDE INVESTMENT ADVISORY AND ADMINISTRATION OF RETIREMENT ASSETS DESCRIPTION OF THE INVENTION The present invention refers generally to an investment program which includes a system and method for collecting, monitoring and directing data from the participants and beneficiaries ("participants") of the Benefit Plan, sponsors. of the Benefit Plan and fund managers and, more particularly, to a data processing system that collects, monitors and directs information from Benefit Plan participants, sponsors and fund managers, to provide professional investment advice to Benefit Plan participants while eliminating them. the inherent economic conflict of interests in traditional Benefit Plan programs. The field of savings for retirement has been greatly impacted by the vigorous growth of all the corporate benefit plans that offer accounts individuals, allowing each participant to direct the investment of the assets located in their individual account. This practice of allowing each individual participant to manage their account has resulted in a need to provide investment advice to a large number of employees, until now unfamiliar with the basic concepts of managing the investment portfolio. The most capable entities to provide such • Investment advisory are the same entities that traditionally manage the investments of the combined funds normally offered in the benefit plans. Such investment managers receive the majority (if not all) compensation as a percentage of managed assets, with such percentages varying from according to the nature of the risk associated with the combined fund administered. For example, an international equity fund will pay an administrator a higher percentage that results in a higher net profit than a national bonus fund manager for funds that have approximately the same assets under its administration. The previously contemplated approaches to provide investment advice to the participants of the Benefit Plan have a cumulative economic interest conflict because the investment adviser traditionally receives higher net profits from some of the combined funds provided against others. This situation could lead to investment advisors / investment managers consciously or unconsciously recommending or investing in funds that they provide to the investment adviser with a higher income, a situation that may not be "of the greatest interest of the participant of the Individual Benefit Plan. Therefore, there is a need for an investment program that eliminates this economic conflict of interest 5 by separating the investment advisory entity from the investment management entity. Such a system must provide compensation for the investment tie totally independent of the investment management entity; provide investment advice completely independent of and unrelated to the trust investment manager and must ensure that the trust investment manager has access only to the aggregate investment of each of the Benefit Plans and not through the individual participants. Therefore, it is an object of the present invention to provide investment assistance to the participants of the Benefit Plan in obtaining a suitable asset location for the assets in their individual accounts. Another object of the present invention is provide an investment program that increases utilization in self-directed benefit plans. An additional object of the present investment is to provide a worksheet that is issued to determine an appropriate investment vehicle for each participant of the Individual Benefit Plan.

A further object of the present invention is to provide a written recommendation in another way in a tangible form for a specific investment vehicle. % based on the analysis of the worksheet. The investment program that includes the present invention balances the performance of investment advice with the long-term objectives of the assets designated for retirement savings. Investment advice can be transferred to each participant through a participant advisor. Investment advice is generated by a "Financial Expert" offset in a completely separate and independent way from the traditional investment management fees normally charged to Combined Trusts (a percentage of the assets under administration). The system and method of the present invention eliminates the possible conflict of economic interest by separating the investment advisory entity from the investment management entity. The professional investment adviser receives fees totally independent of the fees charged by the investment management. The investment adviser is totally independent from and is not related to the investment adviser of the joint Trust. The system and method of the present invention ensure that the investment manager is not aware of the investments of the individual retirement participant, but only sees the aggregate investments of a benefit plan sponsor. One aspect of the present invention is a unique data processing system 5 that provides expert independent investment advice to the P'lan de Beneficio participants, and at the same time offers combined investment trusts managed professionally in a more cost efficient structure. and that eliminates all conflicts of interest that would exist in all currently known schemes to provide investment advice to the beneficiaries of the Benefit Plan. A representative system to provide asset location counseling to participants individuals in a Benefit Plan includes a data storage to store data from the plurality of spreadsheets, each spreadsheet that is completed by a participant of the Benefit Plan • individual; the means for processing the data to from each participant so that each participant risk tolerance is calculated; a model of location of assets for at least two (2) Trusts, the Trusts that include variable proportions of shares in a plurality of Investment Companies without charge; means to correlate the calculated risk tolerance Sfi ~ £ > - * With an adequate Trust; and means to generate a written report that recommends at least one (1) of the two (2) Trusts as an adequate investment vehicle for • each individual participant. 5 A method implemented by representative computer to provide independent expert investment advice to Individual Benefit Plan participants to invest in cost-efficient combined investment trusts. professionally managed while eliminating the conflict of interest between the investment advisor and the trust administrator that includes the steps of: developing a spreadsheet to evoke fundamental needs and risk tolerance levels appropriate for each individual participant; develop a risk profile that includes standards to take into account the "fear factor" of the participants so that the given investment recommendation is likely to be followed by the participant over a long period; develop a asset allocation model for at least two (2) investment vehicles using generally accepted principles of modern portfolio theory; apply the data from the spreadsheets to the asset location model; determine an investment vehicle suitable for the Participant of the Plan; and provide a recommendation to the Plan Participant of at least one of the two (2) investment vehicles. Other objects and advantages of the present application • will become apparent from the following description, the accompanying drawings and the appended claims. BRIEF DESCRIPTION OF THE DRAWINGS Figure 1 is a block diagram that illustrates in a general way the structure of the investment program that includes the system and method of the present invention; Figure 2 is a detailed block diagram of the implementation of the investment program incorporating the systems and methods of the present invention; Figure 3 is a diagram illustrating the investment management and advisory system of the present invention as seen by each participant of the individual plan; Figure 4 is a diagram illustrating the investment management and advisory system of the present invention as seen through benefit plans; and Figure 5 is a schematic diagram of representative computer electromechanical components useful with the current investment advisory program. In order to carry out the present invention in the preferred forms thereof, a investment program 10 (see Figure 1) which includes systems and methods to provide professional asset placement counseling services 12 for individual participants 14 in Benefit Plans to locate their balance sheets in a Trust 20, 22, 24, 26 specifically adapted for their individual risk tolerances and fund needs. retirement. The systems and methods of the present invention are particularly valuable because they provide the participants of the individual plan 14 with much of the necessary advice while taking into account the risk tolerances of the individual plan participants so that each participant of the individual plan It will likely hold the recommended Trust (investment) during the inevitable changes in the market and, in fact, the Trusts will be professionally managed to exploit the opportunities in a down market that most individual plan participants could not exploit. The system and methods of the present invention are favorable to the user in that they are specifically designed to eliminate the confusion of self-assigned individual plan balance sheets while possibly increasing the usage ranges of the Benefit Plan. In the system and method of the present invention, the investment advice is provided directly to the participants of the Benefit Plan, such as, for example, the participants in the plans described in §401 (), of the Internal Revenue Code of 1986, Keogh Plans, IRAs as long as self-direction of the participant is provided. Under program 10 which includes the system and method of the present invention, an investment advisor or asset location advisor 32 makes a recommendation 44 to each individual plan participant 14 of a plurality of Life Cycle Trusts 20, 22, 24, 26 maintained under the program as an investment vehicle to invest the accounting balance of the participants plan. As shown in Figures 1 and 2, it is now anticipated that at least four and possibly more Life Cycle Trusts 20, 22, 24, 26 would be strong, as is intended, by force. at least four separate combined trusts and a money market fund, a guaranteed investment contract or similar vehicle. Each Trust will maintain, in variable proportions, shares of one or all of a plurality of investment companies of an open management investment company. 18. In Investment Advisor 32 directly helps the participants 14 in making appropriate investment decisions for achieve two important objectives: (1) increased use of the Benefit Plan and (2) provide assistance to each participant of the individual Benefit Plan so that each participant is -tK¿ * You are likely to obtain an appropriate location for the assets in your individual plan accounts. Proper asset placement is essential to achieve favorable market gains. The location of appropriate assets is often a function of a stage in the life of the individual plan participant. It is generally accepted that younger participants with higher life prospects should invest in compensated equity trusts, while participants in Seniors with lower life expectancies and greater needs for funds should invest in bond / money market trusts. The four initial Trusts are designed to help any particular participant achieve their needs. retirement fund through the variation of the compensation that each fund supports, currently preferred, a plurality of investment funds without charge. Therefore, each Trust is adapted to meet different retirement investment needs. The recommended course of action provided by the investment adviser to each participant is designed to incorporate prudent practices and procedures of the retirement funds applicable to the defined benefit plans and is provided in a simple and user-friendly form for the participants of the Benefit Plan defined.

A solution to the problem of the Benefit Plan participants who place their balance sheets in less than optimal form should take into account the tendency of typical participants to change investments in response to short-term performance trends. The short-term market volatility has shown that it is the nemesis of individual investors, influencing "buy high and sell low". The first stage in determining a trust suitable for any individual participant is to determine their risk tolerance # among other criteria. A spreadsheet 40, as will be explained later, is used to evoke the information necessary for the investment advisor 32 to recommend the Trust in accordance with each individual participant. 15 This is achieved by determining from each individual plan participant in whose Trust he should invest, taking into account the "fear factor" (ie, the excessive fear of the typical participant of losing any < f / ß money) and the expected fluctuation in the net asset value of each Trust. Each Trust is a portfolio that contains variable percentages of different asset classes through its investments in the plurality of investment companies. That design was implemented to take into account the fact that the return on investment of different fc3-aasaB-S? 5 ?? Asset classes are correlated imperfectly, therefore, cushioning short-term fluctuations in the overall value of the investment portfolio. Because the plan participants will see only the net asset value and the fluctuation in the level of the investment portfolio, ie the Trust itself, they will not be unduly alarmed by the fluctuations of the shares of any of an Investment Company. or investment vehicle incorporated in the Trust. In addition, since each Trust is a portfolio of combined asset classes through its investment in the plurality of investment companies, fluctuations in the value of the shares of individual shareholder companies must mitigate the fluctuations of the portfolio or the Trust. This should help protect the plan participants by subscribing to the temptation to sell a falling asset class in a low market. In fact, it is considered that the opposite will occur in this program, in which to make maximum advantage to the participants of the plan, the asset classes in each Trust will be periodically balanced according to the criteria provided by a Financial Expert 30, as will be explained later. As mentioned before, the investment options available under the asset allocation program of the '** • * & < 13 present invention are presently preferred, initially a selection of at least four Trusts and, if not otherwise available from a Master Plan.

^? Benefits, a money market fund, a guaranteed investment contract or similar vehicle. Each Trust holds shares in a plurality of investment companies in variable proportions. The combination of the plurality of action societies in each Trust will be designed to accommodate the different investment strategies of each of the Trusts. In this regard, the scale of the Trust from those structured aggressively (usually composed of investment companies that invest mainly in equities) to the structured ones. conservative (usually composed of funds that invest mainly in fixed income instruments). The Trusts will include all or part of the investment alternatives of the particular benefit plans. As currently preferred, each Society of Investment has a different investment objective and will be selected from those, currently preferred, available to institutional investors that typically require a minimum investment of approximately $ 250,000 and a minimum of $ 25,000 for additional investments, except for the money market fund, which being 14 currently preferred, requires a minimum initial investment of "100,000 and a minimum of $ 1,000 with the minimums that are waivable." The four trusts currently preterred at least invest exclusively in the shares of some or all of the investment companies in variable proportions, so that each Trust accommodates different investment needs and risk tolerances, as determined by the Financial Expert.The Trusts are designed to provide the placement of suitable assets for at least the four different profiles of participants, with the outstanding factors being the financial objectives, the time horizon, other savings and risk tolerance. A key to the investment program that includes The present invention is the independent Financial Expert 30 who constructs the appropriate asset location models 28 for each Trust. Appropriate asset location models 28 are constructed using principles ^ P generally successful from modern portfolio theory. He E'xperto Financiero is independent and has no pre-existing relationship with and is not in any way under control of the management of the investment fund or the investment company. The Financial Expert's formula of asset location models can include algorithms, studies, analytics, research, models, documents and other products or relevant verbal materials as determined by the administration manager that may be of help or 'of interest to the Financial Expert. In addition, the Financial Expert, in its sole and absolute discretion, may seek assistance from others in the formulation of asset location models. However, in all cases the Financial Expert 30 has the final control and discretion with respect to the development and maintenance of the asset location models. 28. The Financial Expert 30 is fully responsible for the determination of how the location models 28 they implement better and, therefore, will select the investment companies that each Trust will hold and the compensations thereof in order to be compatible with the model of location F of assets developed. Asset location models 28, as expressed in an asset location computing program, when implemented will not be static but the Financial Expert in its sole and absolute professional discretion can make adjustments for the asset location models for Trusts, taking into consideration the investment objectives and the risk tolerance that the asset location models represent and to take into account the changes in the conditions of the economy and the market. Therefore, the Trusts will be used, for the benefit of the participants, concepts based on the needs of the fund and the prescribed risk tolerances influenced by the compensation interests of the Investment Company's management. 5 Once the Trusts are adequately invested in the plurality of mutual fund funds, the return on investment is provided through the plurality of the investment companies that will cause the investment mix of the Trust Fund to fall. from the Trust asset location model. In • At this point, Financial Expert 30 will develop a mechanical formula incorporated into a computer-implemented program suitable to rebalance 38 the relative proportions of the investment companies in each Trust. on a predetermined basis. Such formula and the basis upon which the composition of the Trust is designed will be available to each of the independent trustee of the Benefit Plan before the Benefit Plan • invest in the investment program that includes the system and method of the present investment. The investment program 10 which includes the system and method of the present invention is based on a very simple idea: to provide the individual plan participant responsible for the investment of his accounting balance with the way suitable for the user and convenient for benefit to 'tjjEÉ SBL sast. from the knowledge and experience of professional investment advisors and in this way receive the investment advice relative to the representatives of the Trust in a suitable location of assets in that individual account under the Benefit Plan. As currently preferred, the investment program of the present invention will be available only for sophisticated benefit plans, that is, those with a minimum of $ 5,000,000 active. One of the main objectives of the investment program of the present invention is to make investment decisions as simple and appropriate for the user as possible, while maintaining the integrity and accuracy in the investment advice provided. These objectives are achieved through the investment advisor who acts as a fiduciary in the preparation of a specific investment recommendation based solely on the information provided by, for or on behalf of the participants of the Benefit Plan. This investment advice will be based, at least in part on the responses to questionnaires included in the spreadsheet, mentioned previously, designed by a financial behavior expert 36. Spreadsheet 40 is designed to evoke the fund's needs and tolerance levels of the appropriate risk for each individual participant. He 'jesk? szßü ..- ugly * -Expert of financial behavior will formulate a risk profile and develop the standards that will take into account the fear factor of the participants thus allowing the investment advisor to provide an investment recommendation that the participant It is more likely to continue and maintain for a long period. An important factor in preparing the investment recommendation will be for each of the participants to respond when asked what they would do if a loss, equalization of the largest loss that could occur in the vast majority of possible scenarios actually occurred. If the response indicates that the participant would sell their shares in a specific Trust against such a loss, a more conservative Trust would be recommended for its participants. The spreadsheet 40 will be made available to the participants in many forms, including, but not limited to, hard copies with written instructions and employee recruitment at general information meetings through the Intranet (a subset of the insured access of the Internet), in computer terminals in the office of the sponsor of the Benefit Plan or the sponsor page of the Benefit Plan in the World Wide Web, etc. Completing the spreadsheet through the participants will be interactive for the participants with computer orientation. Such computer-oriented participants will simply be registered with an access code that could be their Social Security number and a large part of the information that participants work with the spreadsheet will automatically be provided typically by the Plan sponsor. of Benefit, such as, for example, age, value of the assets of the Benefit Plan, salary annulments, etc. If any participant does not understand a question during the completion of the sheet Through computer calculations, help will be provided through the computer so that the participant receives a detailed explanation for each question. In addition, 1-th free telephone discussions with participant consultants will be available as well as discussions in front of to answer questions from the participants. Answers to the questions contained in the calculation sheet will measure the risk tolerances that are key to providing impartial investment advice to • the plan participants. The results of the risk of profile of participants as determined from the answers to the questions in the spreadsheet only the same or a less aggressive Trust will be used. In this situation, the investment adviser will be in a position to recommend a more conservative Trust than would be the case. case if the spreadsheet had only one base mathematical and did not have a component of financial behavior. Therefore, by incorporating the financial behavior component in the spreadsheet as fundamental in the determination of the appropriate Trust 5, the inherent conflict of interest that may result from the fees are traditionally paid in the traditional investment vehicles that They are eliminated effectively. Specifically, under the conventional investment programs, through the recommendation of a more aggressive Trust, the typical Investment Company administrator would receive higher fees and net profits, because investment companies on a basis of equity typically pay managers more than investment companies on the basis of bonuses Upon the completion of spreadsheet 40, each response from participant 42 is analyzed and a recommendation 44 from an appropriate Trust is provided to each participant 14. This recommendation of a Trust particular is designed to help each participant in the selection of the asset location based on the risk profile of the participant, the retirement needs and the life cycle stage. The data collection process leads to the recommendation that is designed to provide participants a better understanding of the program emphasizing its purpose and objectives. Such knowledge should better allow participants to maintain their investment in the Trust that is finally recommended, because maintaining this position is compatible with the information provided by the participants through the spreadsheets. Of course, each recommendation will result from the access of the information provided by or on behalf of the participants within the computer programs that contain the parameters provided by the expert in finance 30 and the Expert in Financial Behavior 36. Neither the investment manager nor the participant's advisor 32 have any responsibility to affect or vary the saline of the respective computer programs. Whether a participant 14 chooses to invest in the recommended Trust is entirely within the discretion of the participant; In other words, the participant may disregard the Trust or recommended Trusts, and still invest in other Trusts. In addition, the current investment program does not impose limits on how often a participant can change their investment choice. Therefore, theoretically, a participant could change the investment selection any day that the securities and stock market is working, however, the sponsors of the Benefit Plan must, as a design matter, impose limits. A system monitor 66 completely independent of the plurality of 5 investment company administrators 16 and upon receiving the instructions of an individual plan participant 14, will provide the participants of the individual benefit plan with tangible confirmation of each of the transactions of the participants and also, comments on the Plan account Benefits of the participant will be available via • telephone. Both the participants and the independent fiduciaries of the Benefit Plan will receive periodic information describing the performance of each individual Trust during the previous period, the conditions of market and the economic perspective and, if appropriate, the prospective changes in the asset location model and the reasons for it. The participant advisor 32 receives a reasonable compensation that is not tied to the level of assets under administration in the Trusts. Under the present investment program that incorporates the system and method of the invention, the payment of fees at the Trust level for asset location services will not be separated. Only the fees from investment companies that are charged to all investors and other expenses Ls »ßai & bvtt *.?! I direct reimbursable will be charged to the plan or benefit plans. However, the fees for the finance expert 30, the Expert in Financial Behavior 36, the development of spreadsheet risk tolerance component, the expenses payable to regulatory, accounting, auditing and legal costs, costs of office and administration, costs of printing and sending reports, costs of computer programmers, certain insurance and other expenses (including errors and omissions) and the prize on loyalty bonuses and other expenses incurred by each Trust in the ordinary course of business. Business will be payable to the investment advisor. The investment program 10 which includes the system and method of the present invention as mentioned above, provides a mechanism for benefit plans to provide its participants with professional investment advisory services with respect to the investment of their accounting balances in Trusts specially adapted for your risk tolerance and fund needs for retirement. The program is particularly valuable because it provides participants with much of the necessary advice that takes into account the risk tolerances of the participants so that the participants will equally hold the recommended Trust during the inevitable downward turns in the market. The Trust (s) are &? -i¡ 7Á3 - * sB RS. » managed professionally through placement models of securities incorporated into computer-implemented programs as defined by an independent Financial Expert 30 (through its own internal asset management and through re-balancing) to re-exploit the opportunities in a down market that most participants could not otherwise exploit. It is considered that benefit plans, which provides this benefit program Particularly in order to help its participants achieve the appropriate asset locations they are provided as an investment program that is appropriate for the user or at least reduces the pain and confusion outside of the self-direction of the balance sheets and can result also, at increasing levels of utilization of the Benefit Plan. With the system and method of the current investment program, the individual participants 14 are "protected from exceeding and self-distributing by designated shelter within of the program itself. Specifically, the Trustee of the Trust will provide the independent trustee of each Benefit Plan with a current prospectus that covers the plurality of investment companies and the complete and written description of the fees of investment and investment managers. all other transaction costs and expenses charged to or paid by the Benefit Plan in Investment Company and at the Trust level. The independent trustee of the Benefit Plan will only determine the selection and retention of the investment program included in the present invention for the Benefit Plan. Any individual Benefit Plan will pay no more and receive no less for units in the Trust or shares of the investment companies that the Benefit Plan would have paid or received in a transaction at normal market price with an unrelated part. The shares of investment companies owned by the Trusts, currently preferred, will be investment companies without charge whose negotiation at the net asset value and the negotiation of Trust to the net asset value of the combination of the plurality of investment companies in which they are invested (less accumulated Trust expenses) that is, the amounts paid or received are derived. The broker / broker that executes and conducts the negotiations on behalf of the investment companies are committed on a basis of best execution and are independent of and not affiliated with the managed advisor of Trust. The location of assets of the Trusts are constructed by Financial Expert 30, an independent part of the investment adviser, who uses generally accepted principles of modern portfolio theory. No - ít? t 'F0 $ More than five percent (5%) of the Financial Expert's gross income in any one of its fiscal years will be derived from the financial advisor or its affiliates. The location models 28 will be developed, 5 maintained and, if necessary, completely modified by the Financial Expert. The separate Trusts, whose Sponsor of Benefit Plan builds on the basis of different compensation of the investment companies, can be used if the finance expert approves such modification that is appropriate for that type of Trusts.

• In re-balancing each Trust will be presented on a basis determined by the Financial Expert. The re-balancing will be purely objective, automatic and mechanical with the sole purpose of maintaining the location model of assets. Because the mutual funds selected by the current investment program have considerable assets under management and therefore, the investment companies are independently viable in the institutional market. In addition, outside the investment program that includes According to the system and method of the present invention, the minimum investment in each Investment Company is generally approximately $ 250,000. The fee structure of the investment companies selected is less than the fee structure in the "retail" market typically available to the individual participant. The •# Profit plans are therefore available to take advantage of institutional pricing as a result of their participation in the investment program • current. Additionally, the investment company is responsible for the trust administrators and who employs the participant's advisors will not receive any fee different from those charged by the plurality of investment companies and will receive reimbursement only from those "direct expenses" associated with the operation of program or other costs that they pay to unrelated third parties, as described above. Figure 1 is a block diagram that illustrates in a general way the structure of the inversion program 10 that includes the system and method of the present invention. How I know showed, the investment advisor with respect to the proper location of assets 12 is provided directly to each participant 14 depending on the criteria previously described. The management advice of Sociedad de Inversión 16 is provided directly to the investment companies 18. The compositions of the Trusts 20, 22, 24, 26 are determined by the asset allocation model (See Figure 2) for each Trust as determined by an independent Financial Expert 30. Therefore, the separation of the function of investment advisory of the administration function of 28 Escrow is achieved. As shown, in a Benefit Plan, such as, for example, a 401 (k) Benefit Plan, participants 14 can receive asset location counseling 12, directly from a participating advisor 32 that is separate from the Financial Expert 25 and the Investment Company administrators 16. Based on this advice, the participants then invest in one or a number of pluralities of different Trusts, such as, for example, a more conservative Trust 20, a Conservative Trust 32, an aggressive 24 Trust or a more aggressive Trust 26. As shown, the Participating Advisor 32 that provides the investment recommendation to the Benefit Plan 14 participants and the plurality of Investment Company Management Advisors 16 are two totally separate entities and are compensated according to totally different compensation plans-. Figure 2 shows a detailed block diagram of the implementation of the investment program that incorporates • the systems and methods of the present invention. How I know shows, a computer 34 receives entries from the Financial Expert 30 and the Financial Behavior Expert 30 and the Financial Behavior Expert 36. Specifically, as described above, asset allocation models 18 developed by the Expert Financial 30 and at an appropriate time, an asset balancing model or computer program 38 are loaded by the computer 34. A spreadsheet computer program prepared by a computer programmer w incorporating the spreadsheet 40 developed by the Financial Behavior Expert 36 is loaded into the computer 34. The spreadsheet 40 is then transmitted by the computer 34 to the participant's advisor 32 for transmission to the plan 14 participant or directly to the plan participant. Upon receipt of the spreadsheet, the plan participant fills in the spreadsheet 40 and then the data 42 from the spreadsheet 40 either provided to the participant advisor 32 to register on the computer 34 or the data from the worksheet 40 are registered directly within the computer 34 by the plan participant 14. The reception of the data 42 from the spreadsheet, the computer 34, taking into consideration the active location models 28 and the psychological profile 35 ^ provided by the financial behavior expert 36, calculates an investment recommendation 34. Investment recommendation 44 s communicated to the participant's advisor 32 who translates that recommendation into a tangible investment recommendation 46 that is then transmitted to the plan participant 1. Upon receipt of the recommendation of tangible investment 46, the participant of plan 14 takes . •, "Iet? L? Fe? Á3ííS * Át an investment decision 48 u- © is communicated either directly to the computer 34 or to the computer through the participant advisor 32. Upon receipt of the investment decision 48, the Computer 34 locates certain shares of the chosen 5 Trust or series of Trusts 20, 22, 24, 26 which in turn may require that the Trust and elected Trusts adjust the number of shares of the different investment vehicles 50, 52, 54 , 56, 58, 60, 62, 64 contained in the Trust 10 Figure 3 is a schematic representation of the investment program structure as seen by each participant 14, 14a, 14b, 14c In this scheme, the assessor of participant 32 communicates with a system monitor 66 that controls the computer 34 which in turn communicates with each participant of Benefit Plan 14, 14a, 14b, "14c The computer-based system monitor 66 collects the data from each Trust 20, 22, 24, 26 and keeps track of each participant account in each Trust. computer based system monitor 66 also collects data and transaction instructions from the Investment System Advisor 32 and carries out the transactions by transferring the participant's Trust Account assets between the Trusts as instructed by each participant through the Investment Advisor. participant. Additionally, the system monitor 66 is ^ -. -A adds and embeds the transactions between the participant's account and all the participants and Trusts. The system monitor 66 provides the data that indicates the aggregate balance sheets and the transactions between each Trust and each of the plurality of investment companies (see Figure 2), although not the individual participant balance sheets and the transactions for each administrator. of Investment Company 16 (see Figure 1). The investment company 32 collects the data from the system monitor 66 sufficient to calculate the investment advisory fees. These fees are currently anticipated to be in the form of a fee per hour, a per capita fee or a fee based on the assets or any combination of the above. As shown in Figure 4, the system monitor 66 collects and processes the data from the Trustee participant account and adds the accounts by separate and different benefit plans 68, "70, 72. For each Benefit Plan, the total participant amount in Trusts within the Benefit Plan, the system monitor 66 calculates and reports to each trustee of the Benefit Plan and sponsor of plan the account assets of total participants in the Trust in each Trust.

The transactions will be "obtained" and aggregated within each Benefit Plan and the system monitor "obtains" and adds the transactions through any or all of the • benefit plans when required. 5 The system monitor 66 also calculates and reports the investment advisory fees for each individual participant account of Trust assets and an aggregate for each Benefit Plan. The system monitor 66 invoices each Trust for the total sum of the investment advisory fees due to the assets of each Trust. The trust administrator is directed to transfer money to the investment company 32. The systems monitor 66 calculates and reports the total investment advice fees paid for each account. participant in Trust assets, through each participant 14, 14a, 14b, 14c and through each Benefit Plan 68, 70, 72. The data processing system used by the system monitor isolates the investment company and its fees from the Trust Fund Administrator and their expenses for maintaining separate files and cells for each of the aforementioned fees. This isolation and masking of fees from each party removes any economic incentive or gain for direct the Trust asset funds from participant accounts in Trusts that generate higher fees that are inappropriate for the particular participant although more advantageous to either the Investment Company's management or the investment company. The computer program of the system monitor, in its initial form, will be initially designed and updated constantly to follow and adhere to all ERISA and other restrictions and requirements. The investment program described above is considers that it is particularly attractive for benefit plans if their participants and beneficiaries because such participants will receive professional advisory services for the investment of their accounting balances in Trusts specifically adapted for their tolerance of risk and retirement fund needs. The investment program provides the participants with much of the necessary investment advice that takes into account the risk tolerances of the participants so that the participants will probably keep the "Trust" recommended during the inevitable downs in the market and in fact, as mentioned before, the Trust will be professionally managed to exploit the opportunities in a down market that most participants could not exploit. Therefore, the participants will be helped to achieve the location of active increased utilization regimes of the Benefit Plan. Changes and modifications in the specifically described embodiments can be carried out without departing from the scope of the invention which is intended to be limited only by the scope of the appended claims.

Claims (8)

1. CLAIMS.
2. A system for providing investment recommendations to individuals characterized in that it comprises: a data storage device for storing data from a plurality of spreadsheets, each worksheet being completed by an individual; a processor for processing the data from each of the respective individual spreadsheets to calculate a corresponding individual risk tolerance; an asset location model adapted to be applied to at least two investment groups, where each group of investments includes variable proportions of shares in a plurality of investments; the processor that uses the asset allocation model to correlate the calculated individual risk tolerance with a corresponding investment group; and an exit mechanism, coupled to the processor, to generate a report that recommends at least one of at least two investment groups as an appropriate investment for each individual; where the report establishes a range of returns for at least one of the two investment groups as a function of time. with claim 1, characterized in that the processor is adapted to process the data of each individual, so that each report is based on at least one of the withdrawal needs of the individual and stage of the individual life cycle; and the processor also includes a correlation mechanism to correlate retirement needs and the life cycle stage with a group of appropriate investments. 10 3.
3. A method implemented by computer for "^ provide independent investment recommendations to individuals to invest in a managed fund while eliminating the conflict of interest between an investment recommendation provider and a fund manager, the A method comprising the steps of: developing a spreadsheet to evoke input parameters that include background needs to allow the calculation of individual risk tolerance levels appropriate for the individual; 20 calculate a risk profile for the individual that considers a "fear factor" indicative of a likelihood that the investment recommendation is likely to be followed by the individual over a period of time; apply an asset location model to at 25 minus two investment vehicles; apply data from spreadsheets to the asset location model; and based on the calculated risk profile, provide a tangible recommendation to the individual of at least one of the two investment vehicles, where the recommendation establishes a range of returns during at least one of the two investment vehicles as a function weather. .
4. A method implemented by computer to provide investment advice to individuals, the method characterized by comprising the steps of: collecting data from a spreadsheet completed by an individual; calculate a risk tolerance for the individual; apply an asset location model to at least four Trusts, the Trusts, which hold shares in variable proportions of a plurality of investment companies without charge; apply the calculated risk tolerance to the asset location model for at least four Trusts; and generate a tangible report that recommends at least one of at least four Trusts as an appropriate investment vehicle for the individual.
5. 5. The system for providing investment recommendations to individuals according to claim 1, characterized in that the processor also includes a mechanism adapted to accept data related to the previous performance of the recommended group of investments during a specific period of time, and, on a substantially periodic basis, which provides a performance update report to the output mechanism indicative of a profit regime for the recommended group of investments during the specified time period.
6. 6. The system for providing investment recommendations to individuals according to claim 5, characterized in that the processor also includes a mechanism adapted to accept the data related to the previous performance of at least two investment groups, which includes the recommended group of investments and another group of investments, during a specific period of time and, on a substantially periodic basis, by providing a performance update report to the exit mechanism indicative of the first refund regime for the recommended group of investments and a second regime of return for the other group of investments over the specified period of time. .
7. The method implemented by computer to provide independent investment recommendations to individuals to invest in managed funds according to claim 3, characterized in that they also comprise the step of: accepting the input data related to the previous performance of at least two groups of investments, including the recommended group of investments and another group of investments, during a specified period of time; and on a substantially periodic basis, generate a tangible performance update report indicative of a first return range for the recommended investment group and a second refund regime for the other investment group over the specified time period.
8. 8. The computer-implemented method for providing independent investment recommendations to individuals to invest in managed funds according to claim 3, characterized in that it also comprises the steps of: accepting the input data related to the previous performance of at least two investment groups, including the recommended group of investments and another group of investments - = ^ during a specified period of time; and on a substantially periodic basis, generate an updated tangible performance report indicative of a first refund regime for the recommended investment group and a second refund regime for the other investment group over the specified time period. ^ fESÜMgN A system and method for a system monitor implemented by data processor (10) to allow individual participants participant (14) to have access to 5 independent professional money management for the assets of the Benefit Plan adapted to separate the functions of investment management and the fees thereof, based on the participant's advisory function and its fees. The system and method provide 10 professional assets placement counseling services (12) to individual participants (14) of the Benefit Plans to locate their account balances in a Trust (20, 22, 24, or 26) specifically adapted for their individual risk tolerances and background needs 15 for the withdrawal. A spreadsheet (40) is used to evoke the information necessary for the investment advisor (32) to recommend the Trust (20, 22, 24, or 26) appropriate for each individual participant (14). Each Trust (20, 22, 24, 26) holds shares in a plurality of funds 20 mutuals in variable proportions.