Patent Publication Number: US-8533092-B1

Title: Financial evaluation process

Description:
CROSS-REFERENCE TO OTHER APPLICATIONS 
     This application claims priority to U.S. Provisional Patent Application No. 61/470,251 entitled WEALTH MEASUREMENT PROCESS filed Mar. 31, 2011 which is incorporated herein by reference for all purposes. 
    
    
     BACKGROUND OF THE INVENTION 
     It is difficult for an individual to accurately assess his or her financial stability, position and health. Not only is it difficult for an individual to determine the complex set of factors that goes into assessing an individual&#39;s finances, it is even more difficult to determine how to assess each factor and combine each factor to determine an overall assessment. Even if an individual was able to assess one&#39;s financial health, the individual faces the challenge of determining how to improve and/or maintain one&#39;s financial health. Traditionally financial planners and advisors have fulfilled these needs. However, not all individuals have the time or resources to access a financial planner. Additionally, there does not exist a single authoritative standard on the methods financial planners use to assess a client&#39;s finances, and the client is unable to determine whether a reliable method is being used to assess the client. Therefore, there exists a need for a better way to assess the financial stability, position and health of an individual. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       Various embodiments of the invention are disclosed in the following detailed description and the accompanying drawings. 
         FIG. 1  is a block diagram illustrating an embodiment of a system for determining a financial evaluation score. 
         FIG. 2  is a flow chart illustrating an embodiment of a process for determining a financial evaluation score. 
         FIG. 3  is a flow chart illustrating an embodiment of a process for determining a factor score. 
         FIG. 4  is a flow chart illustrating an embodiment of a process for determining a factor score. 
         FIG. 5  is a flow chart illustrating an embodiment of a process for determining a financial evaluation score. 
         FIG. 6  is a flow chart illustrating an embodiment of a process for determining the most important action(s) that will impact a financial evaluation score. 
     
    
    
     DETAILED DESCRIPTION 
     The invention can be implemented in numerous ways, including as a process; an apparatus; a system; a composition of matter; a computer program product embodied on a computer readable storage medium; and/or a processor, such as a processor configured to execute instructions stored on and/or provided by a memory coupled to the processor. In this specification, these implementations, or any other form that the invention may take, may be referred to as techniques. In general, the order of the steps of disclosed processes may be altered within the scope of the invention. Unless stated otherwise, a component such as a processor or a memory described as being configured to perform a task may be implemented as a general component that is temporarily configured to perform the task at a given time or a specific component that is manufactured to perform the task. As used herein, the term ‘processor’ refers to one or more devices, circuits, and/or processing cores configured to process data, such as computer program instructions. 
     A detailed description of one or more embodiments of the invention is provided below along with accompanying figures that illustrate the principles of the invention. The invention is described in connection with such embodiments, but the invention is not limited to any embodiment. The scope of the invention is limited only by the claims and the invention encompasses numerous alternatives, modifications and equivalents. Numerous specific details are set forth in the following description in order to provide a thorough understanding of the invention. These details are provided for the purpose of example and the invention may be practiced according to the claims without some or all of these specific details. For the purpose of clarity, technical material that is known in the technical fields related to the invention has not been described in detail so that the invention is not unnecessarily obscured. 
     A financial evaluation process is disclosed. In some embodiments, a financial evaluation score is determined based on a plurality of factor scores. A factor score is determined for one or more factors, such as factors in financial goal setting, a financial evaluation, investments, liabilities, protection planning, retirement planning, liquidity/cash flow, estate planning, tax, and financial ratios, among others. For example, an individual answers questions and/or provides financial information regarding a plurality of factors and the responses/information provided by the individual are used to generate a financial evaluation score. 
     Using the financial evaluation score, individuals may be able to reliably assess the financial “health” of the individual. For example, the relative value of the financial evaluation score will help an individual answer questions such as: “Am I on track to meet my financial goals (retirement, income, etc.)?”; “How secure is my financial future?”; “Am I doing the right things financially?”; and “What is my progress towards establishing a financial plan?” 
     In some embodiments, the financial evaluation score is based on the individual goals. For example, the financial evaluation score is correlated with how close the individual is to achieving the individual&#39;s identified financial goal(s). For example, a high financial evaluation score is associated with an individual that is close to achieving the individual&#39;s financial goal(s) and future financial security, whereas a low financial evaluation score is associated with an individual that is not very close to achieving the individual&#39;s financial goals and future financial security. In some embodiments, the score is comparable against other individuals with similar goal(s), demographics, and/or financial position to determine the financial “progress” of the individual as compared to other similar individuals. In some embodiments, the financial evaluation score includes components that at least in part measure the subject&#39;s progress towards establishing a financial plan. In some embodiments, the financial evaluation score at least in part measures the knowledge and/or received education of a subject with respect to information and/or considerations associated with financial planning. 
     In some embodiments, a user is able to improve and/or maintain the user&#39;s financial “health” by identifying ways to improve and/or maintain the user&#39;s financial evaluation score. For example, by analyzing potential changes to the financial evaluation score, a user is able to assess the impact of financial actions/inactions on the ability of the individual to achieve the user&#39;s financial goal(s). In some embodiments, a plurality of actions that will influence the financial evaluation score is determined and ranked based on their total impact on the financial evaluation score. For example, actions (e.g., increase liquidity, purchase insurance, investment decisions, etc.) to improve an individual&#39;s financial evaluation score are suggested to a user. The actions are provided to the user in an order based on the potential impact of the action on the individual&#39;s financial evaluation score. In another example, a user may specify a desired financial action/result (e.g., purchase a new car) and its impact on the user&#39;s financial evaluation score is provided to the user along with alternative actions (e.g., no action, buy used car, lease car, etc.) and their impact on the user&#39;s financial evaluation score are provided. In some embodiments, the action option(s) to be considered for a user and/or the action(s) recommended to the user are determined based in part on information provided by a user in order to determine the user&#39;s financial evaluation score. For example, a subset of a list of possible actions is determined to be possibly applicable to the user based on the user provided information, and each action of the subset is analyzed to determine its impact on the user&#39;s financial evaluation score. 
     In some embodiments, a list of recommended investment options are provided to a user based at least in part on the user&#39;s financial evaluation score and/or information provided by the user. For example, at least a portion of the investment options available on the user&#39;s retirement account are ordered by its potential impact on the user&#39;s financial evaluation score. Using this potential impact and a provided risk profile of the user, one or more of the investment options are recommended to the user. 
       FIG. 1  is a block diagram illustrating an embodiment of a system for determining a financial evaluation score. Server  102  is connected to client  106  via network  104 . In some embodiments, client  106  accesses data and/or services provided by server  102  and provides information to server  102  via network  104 . For example a user utilizes client  106  to access an internet website at least in part provided by server  102 . The internet website enables the user to provide information required to determine a financial evaluation score for the user. The website may also provide to client  106  tools, referrals and information for a user of client  106  to improve and/or maintain the financial evaluation score. Any number of servers and clients may be connected to network  104 . Client  106  may access a plurality of servers connected to network  104  to provide and/or obtain information related to a financial evaluation score. Any number of clients may access one or more servers, such as server  102 , via network  104 , to determine and/or interact with a financial evaluation score. In various embodiments, server  102  is connected to a storage, such as a database, that stores information associated with financial record(s) (e.g., user provided information, financial evaluation score(s), educational information, actions to improve a financial evaluation score, financial metrics, etc.) of one or more users. In some embodiments, server  102  obtains information about a user from another server connected to network  104  to determine a financial score. For example, server  102  accesses a bank server to automatically obtain financial information associated with a user. In some embodiments, client  106  is associated with a financial advisor, and the financial advisor provides financial information associated with an individual client of the financial advisor to server  102  via client  106 . Network  104  may include one or more of the following: a direct or indirect physical communication connection, mobile communication network, Internet, intranet, Local Area Network, Wide Area Network, Storage Area Network, and any other forms of connecting two or more systems or storage devices together. 
       FIG. 2  is a flow chart illustrating an embodiment of a process for determining a financial evaluation score. In some embodiments, the process of  FIG. 2  is at least in part performed by server  102  of  FIG. 1 . At  204 , factor scores are determined based on factors. In some embodiments, factor scores are determined for each component of information about a subject used to determine a financial evaluation score. In some embodiments, determining the factor scores at  204  includes determining a score for each set of information used to evaluate a financial position of an individual. For example, a score is determined for each and/or group of questions, answers, financial information, financial metric, and/or financial ratio received or determined for the subject to be scored. In some embodiments, a factor score is determined at least in part by adding a plurality of sub scores. In some embodiments, a factor score is determined at least in part by scaling an intermediate score by a discounting/weighing factor value. In some embodiments, a factor score is a negative value (e.g., a factor score based on expense to income ratio). In some embodiments, a factor score indicates knowledge and/or consideration of information and/or strategy associated with a factor. For example, a user&#39;s financial evaluation score can be improved by learning about financial planning factors. 
     At  206 , a total score is determined based on the factor scores determined at  204 . In some embodiments, determining the total score includes adding, averaging, scaling, multiplying, dividing, discounting, subtracting, weighing, and/or otherwise statistically processing at least a portion of the factor scores to determine the total score. For example, the total score is a sum of all of the factor scores. In various embodiments, the total score determined in  206  is the financial evaluation score discussed throughout the specification and/or can be used as a metric of a financial planning of an individual. 
     In some embodiments, the factor score and/or the total score is decayed (e.g., reduced by a predetermined value or percentage after each predetermined time period) based on a time value (e.g., a factor score is reduced over time). For example, although a subject may obtain the maximum factor score for a factor associated with having knowledge of the subject&#39;s current credit score, this factor score will be reduced by a predetermined value every 3 months. Thus in order to maintain the maximum factor score for this factor, the subject needs to revisit the subject&#39;s credit history/score every 3 months. In some embodiments, a factor score associated with whether a subject has knowledge on a particular topic is decayed based on a time since knowledge was acquired to signify that the knowledge must be refreshed periodically. 
     At  208 , an impact of an action on the total score is determined. In some embodiments, determining the impact at  208  includes determining a new total score due to an action or considered action of a subject. For example, a difference in the total score of a subject if the subject obtains a recommend life insurance is determined at  208  and provided to a user. In some embodiments, the action of  208  is determined from a set of possible actions that an individual could perform to possibly improve and/or maintain the subject&#39;s total score. For example, for each action in a group of possible actions to improve the subject&#39;s total score, the score impact of the action on the total score is determined. In some embodiments, the action is associated with a desired action indicated by an individual. For example, an individual desires to purchase a home and the impact of purchasing the home on the individual&#39;s total score is determined at  208 . In some embodiments, the action of  208  is an action that is an alternative action (e.g., purchase a house of less value, rent instead of purchasing a home, etc.) to a desired action of an individual scored at  206  in order to provide possible alternative actions that may be more beneficial to a financial position of the individual. 
       FIG. 3  is a flow chart illustrating an embodiment of a process for determining a factor score. In some embodiments, at least a portion of the process of  FIG. 3  is included in  204  of  FIG. 2 . For example, at least a portion of the process of  FIG. 3  is used to determine one or more factor scores for the associated factor(s) in  204  of  FIG. 2 . In some embodiments, the process of  FIG. 3  is at least in part performed by server  102  of  FIG. 1 . At  302 , a response to a provided factor question is received. In some embodiments, the factor question includes a request for information of a subject desiring to obtain a financial evaluation score. For example, an individual selects a response on a website for a provided question regarding whether the individual has established a retirement savings account. 
     At  304 , information, tool(s), guidance and/or referral(s), if applicable, are provided based on the response and the response is updated, if appropriate. In some embodiments, the information, tool(s), guidance and/or referral(s) are provided to a subject being scored if the response received at  302  indicates an opportunity for the individual to improve the individual&#39;s factor score and/or total score of  FIG. 2  using the information/tool/guidance/referral. In one example, if the response indicates that the individual has not sufficiently defined a financial goal, a guidance on considerations that go into establishing a goal is provided to enable the individual to establish a financial goal. In another example, if the response indicates that an individual is not aware of financial information of the individual, a referral to a source where the information can be obtained (e.g., website link) or a person/service who can help obtain the information is provided to assist the individual in obtaining the information. In another example, if the response indicates that the individual is not aware of financial options that are available to the individual (e.g., investment strategies, types of available insurance), educational materials (e.g., reading material, video, and audio) are provided to educate the individual. In another example, if the response indicates that the individual cannot figure out a desired retirement age, a tool is provided to help the individual calculate the optimal retirement age. 
     At  306 , a factor score is computed based on the response. In some embodiments, computing the factor score includes using a predetermined score value associated with the response. In some embodiments, computing the factor score includes using a value associated with the response in a formula to determine the factor score. At  308 , the factor score is adjusted and/or scaled, if applicable. In some embodiments, the factor score is scaled using a scaling multiplier (e.g., a discount/weighing factor value) determined based on financial information and/or financial actions of the subject being scored. For example an intermediate score based on whether a subject has knowledge of a particular topic is discounted by a value associated with a financial status and/or action of the subject to signify that certain points for knowledge should only be credited if associated actions/values can be demonstrated. In some embodiments, the factor score in  308  is one of a plurality of factor scores adjusted using an adjustment value. For example, the factor score is added to one or more other factor scores to determine a group score before adjusting the group score using an adjustment value. 
       FIG. 4  is a flow chart illustrating an embodiment of a process for determining a factor score. In some embodiments, at least a portion of the process of  FIG. 4  is included in  204  of  FIG. 2 . For example, at least a portion of the process of  FIG. 4  is used to determine one or more factor scores for the associated factor(s) in  204  of  FIG. 2 . In some embodiments, the process of  FIG. 4  is at least in part performed by server  102  of  FIG. 1 . At  402 , information associated with a goal is received. In some embodiments, receiving the information associated with a goal includes receiving numerical value(s) associated with a financial goal, financial(s), and a desired time to achieve the goal. At  404 , a simulation is performed using the received information. For example, a Monte Carlo simulation is performed at  404 . In some embodiments, the simulation simulates future likelihood that the financial goal(s) will be met in a desired time frame. At  406 , a percentage of times the simulation result achieved an indicated goal in a specified portion of the simulations is determined from the simulation. For example, the maximum percentage of times the financial goal(s) of a subject was met in 80% of the simulations is determined. At  408 , a factor score based on the determined percentage is determined. For example, the factor score in  408  is determined at least in part by multiplying an associated maximum factor score by the determined percentage. 
       FIG. 5  is a flow chart illustrating an embodiment of a process for determining a financial evaluation score. In some embodiments, the process of  FIG. 5  is included in  206  of  FIG. 2 . In some embodiments, the process of  FIG. 5  is at least in part performed by server  102  of  FIG. 1 . At  502 , a category score for a group of factors associated with the group is determined. For example, factor scores of group of factors are added together to determine the category score. Examples of categories includes goal setting factors, investments factors, debt optimization factors, protection planning factors, retirement factors, cash flow factors, estate planning factors, and tax factors. Detailed examples of factors included in these groups are provided later in the specification. At  504 , the group score is adjusted, if applicable. In some embodiments, group score is adjusted using an adjustment value (e.g., a weighing multiplier, value to be subtracted, etc.) determined based on financial information of the subject to be scored. At  506 , one or more category scores are summed together along with any number of other factor scores, if applicable, to determine a total score. In some embodiments, the total score is the total score of  FIG. 2 . 
       FIG. 6  is a flow chart illustrating an embodiment of a process for determining the most important action(s) that will impact a financial evaluation score. In some embodiments, the process of  FIG. 5  is included in  208  of  FIG. 2 . In some embodiments,  208  of  FIG. 2  is included in  604  of  FIG. 6 . In some embodiments, the process of  FIG. 6  is at least in part performed by server  102  of  FIG. 1 . At  602 , actions that will influence the factor scores are identified. In some embodiments, factor scores are factor scores discussed along with  FIG. 2 . In some embodiments, identifying the actions includes identifying actions based on information provided by a subject. For example, information provided by a subject in order to determine a financial evaluation score is used to determine a set of actions that is more likely than other actions to improve the subject&#39;s financial evaluation score if implemented. In some embodiments, identifying the actions in  602  includes analyzing a group of potential actions to determine one or more of those potential actions that can improve the individual&#39;s financial evaluation score. In some embodiments, the actions of  602  are associated with a desired financial action/transaction indicated by the individual. At  604 , the identified actions are ranked based on their total impact on the factor scores. For example, for each action, one or more factor scores that will be affected by achieving the action are identified and the value of the impact on those factor scores for the single action are added together to determine the total impact of the action. The actions are then ordered in an order associated with their total impact. 
     At  606 , the most important action to impact the total score is determined. In some embodiments, determining the most important action includes determining an action that will have the largest potential to improve an individual&#39;s financial evaluation total score. In some embodiments, determining the most important action includes determining an action that will have the largest potential to improve an individual&#39;s financial evaluation total score, taking into account the associated difficulty of achieving the action. For example, the actions are sorted into groups of difficulty levels of achieving the action and the actions within each group are ranked according to their impact on the financial evaluation score. 
     In various embodiments, the most important action and/or the ranking of the actions are indicated to a user. For example, a user is provided a list of at least a portion of the identified actions of  602  ordered in the rank determined in  604 . The most important action determined at  606  may be indicated to the user as the suggested next action item to accomplish. In some embodiments, for at least a portion of the actions indicated to the user, one or more assistance/tools/information/referrals useful in performing the action are provided along with the indicated actions. 
     Although scores associated with individuals have been discussed above, the processes and systems discussed in the specification can be used to determine a financial evaluation score for a couple, a family, or any group of individuals. For example, a score can be determined for each individual in the group and combined (e.g., averaged, scaled and added) and/or information associated with a plurality of individuals can be used in determining the sub score components. 
     An example of how to determine a financial evaluation score (i.e., total score) and its components (e.g., factor scores) is described below, along with a detailed example of how a financial evaluation score was determined for a hypothetical individual. These examples are merely illustrative. Any number of different score values, factors, factor scores, information and grouping may be used. In this example, the financial evaluation score includes two main groupings of factors, “Building the Nest” factors (financial planning and fundamental components, comprising 500 of the 1000 total points of the financial evaluation score) and the “Funding the Nest” factors (measurements of readiness of assets to achieve financial goal(s), comprising the rest of the 500 points). 
     The “Building the Nest” factors (500 points total) are grouped into the following categories of components: “Goal Setting” (50 points maximum), “Investments” (70 points maximum), “Debt Optimization” (50 points maximum), “Protection Planning” (70 points maximum), “Retirement Planning” (70 points maximum), “Cash Flow” (80 points maximum), “Estate Planning” (70 points maximum) and “Tax” (40 points maximum). 
     The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) of the “Goal Setting” category are summarized in the chart below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                 Identify financial goals (e.g., 
                  5* 
                 Full score for identifying desired financial 
               
               
                 college, retirement, second home, 
                   
                 goal(s), zero score otherwise 
               
               
                 wedding, purchase car, etc.) 
                   
                   
               
               
                 List of Assets and Liabilities 
                 10* 
                 Full score for identifying current assets and 
               
               
                   
                   
                 liabilities, zero score otherwise 
               
               
                 Cost of goal(s) 
                  5* 
                 Full score for identifying cost(s) associated 
               
               
                   
                   
                 with desired financial goal(s), zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Time period to achieve goal(s) 
                  5* 
                 Full score for identifying desired time 
               
               
                   
                   
                 period to achieve desired financial goal(s), 
               
               
                   
                   
                 zero score otherwise 
               
               
                 Complete risk tolerance survey 
                 15* 
                 Full score for completing the survey, zero 
               
               
                 (e.g., risk tolerance survey similar 
                   
                 score otherwise 
               
               
                 to ones offered by FinaMetrica Pty 
                   
                   
               
               
                 Limited to identify desired risk 
                   
                   
               
               
                 tolerance and investment 
                   
                   
               
               
                 tolerance) 
                   
                   
               
               
                 Appropriate investment/saving 
                  5* 
                 Full score for having considered 
               
               
                 vehicles considered and 
                   
                 appropriate investment/savings vehicles, 
               
               
                 established? (e.g., checking 
                   
                 zero score otherwise 
               
               
                 account, money market account, 
                   
                   
               
               
                 certificates of deposit, mutual 
                   
                   
               
               
                 funds, savings account, stocks, 
                   
                   
               
               
                 bonds, annuities, IRA, 401(k) or 
                   
                   
               
               
                 other retirement plan, etc.) 
                   
                   
               
               
                 Identification of sources for 
                  5* 
                 Full score for researching and considering 
               
               
                 funding (e.g., cash, retirement, 
                   
                 all indicated sources for funding financial 
               
               
                 savings, inheritance, etc.) financial 
                   
                 goal(s), zero score otherwise 
               
               
                 goal(s). 
               
               
                   
               
               
                 *subject to scaling multiplier 
               
            
           
         
       
     
     All of the factor scores in the category above are scaled by a liquidity scaling multiplier. If the total monthly expenses of at least three months can be covered with liquid assets (e.g., assets that can be converted to cash with little or no penalties within a few days), then the factor scores of the “Goal Setting” category above remain the same (i.e., multiplier of 1). However, if the total monthly expenses of only two months can be covered with liquid assets, then the factor scores of the “Goal Setting” category are reduced by 25% (i.e., multiplier of 0.75). If the total monthly expenses of only one month or less can be covered with liquid assets, then the factor scores of the “Goal Setting” category are reduced by 50%. For example, the factor scores above for the “Goal Setting” category are determined for a subject and these factor scores are added together to determine a group score. The group is reduced by 50% (i.e., multiplied by 0.5) if the individual&#39;s liquid assets can only cover one month of expenses. 
     The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) of the “Investments” category are summarized in the chart below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                 Making current contributions, net 
                 10* 
                 Full score for contributing to a financial 
               
               
                 of withdrawals in the last 90 days, 
                   
                 vehicle in order to achieve financial 
               
               
                 to meet financial goal(s) 
                   
                 goal(s), zero score otherwise 
               
               
                 Diversification of strategy 
                 10* 
                 Full score if diversification of investment 
               
               
                   
                   
                 styles and types have been considered, zero 
               
               
                   
                   
                 score otherwise 
               
               
                 Own non-correlated/alternatives as  
                 10* 
                 Full score if at least two held investments 
               
               
                 a portion of overall portfolio 
                   
                 do not have correlated returns, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Auto-balance 
                  5* 
                 Full score if held investments are re- 
               
               
                   
                   
                 balanced periodically to desired risk 
               
               
                   
                   
                 profile, zero score otherwise 
               
               
                 Auto save 
                  5* 
                 Full score if an automatic investment plan 
               
               
                   
                   
                 has been established, zero score otherwise 
               
               
                 Liquidity needs consideration  
                  5* 
                 Full score if liquidity needs have been 
               
               
                   
                   
                 considered with respect to investment 
               
               
                   
                   
                 strategies, zero score otherwise 
               
               
                 Time horizon consideration 
                  5* 
                 Full score if time horizons have been 
               
               
                   
                   
                 considered with respect to investment 
               
               
                   
                   
                 strategies, zero score otherwise 
               
               
                 Types of investments (e.g., 
                  5* 
                 Full score if different types of available 
               
               
                 income, growth, real estate) 
                   
                 investments have been considered with 
               
               
                 consideration 
                   
                 respect to investment strategies, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Diversification of investment 
                  5* 
                 Full score if diversification of assets has 
               
               
                 vehicles 
                   
                 been accomplished (e.g., through the use of 
               
               
                   
                   
                 one or more vehicles such as mutual funds, 
               
               
                   
                   
                 exchange traded funds, or separately 
               
               
                   
                   
                 managed accounts), zero score otherwise 
               
               
                 Tax consequences consideration 
                  5* 
                 Full score if tax effects have been 
               
               
                   
                   
                 considered with respect to investment 
               
               
                   
                   
                 strategies, zero score otherwise 
               
               
                 Dollar cost averaging 
                  5* 
                 Full score if dollar cost averaging 
               
               
                 consideration 
                   
                 investment strategy has been considered 
               
               
                   
                   
                 with respect to investment strategies, zero 
               
               
                   
                   
                 score otherwise. 
               
               
                   
               
               
                 *subject to scaling multiplier 
               
            
           
         
       
     
     All of the factors scores for the “Investment” category above are scaled by a risk allocation scaling multiplier. The factor scores in this category are reduced if current investments are more or less risky than a recommended risk investment profile. Specifically, the scores are multiplied by the scaling multiplier=1−((difference between the recommended risk allocation and the current risk allocation)/(recommended risk allocation)). For example, if an individual has a recommended risk allocation of 50% and currently 55% of the investments are at risk, a factor score in this category is multiplied by the risk allocation scaling multiplier, which equals 90%=1−((55%-50%)/50%). 
     The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) of the “Debt Optimization” category are summarized in the chart below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                   
               
            
           
           
               
               
               
            
               
                 Knowledge and identification of 
                 5 
                 Full score for knowledge of different types 
               
               
                 mortgage structure/mortgage 
                   
                 of mortgages and the ability to identify the 
               
               
                 accelerated payoff options 
                   
                 type of mortgage held, zero score otherwise 
               
               
                 Knowledge of credit card usage 
                 5 
                 Full score for knowledge of credit card 
               
               
                 optimization 
                   
                 mechanics and the ability to identify the 
               
               
                   
                   
                 details of currently held credit card, zero 
               
               
                   
                   
                 score otherwise 
               
               
                 Knowledge of debt cost reduction  
                 10 
                 Full score for knowledge of different types 
               
               
                 strategies (e.g., strategies to lower 
                   
                 of debt cost reduction strategies, zero score 
               
               
                 interest rates, etc.) 
                   
                 otherwise 
               
               
                 Review of credit score 
                 7 
                 Full score for knowledge of credit score, 
               
               
                   
                   
                 the reasons for the current score and how to 
               
               
                   
                   
                 improve the credit score, zero score 
               
               
                   
                   
                 otherwise. 
               
               
                 Knowledge of lines of credit 
                 5 
                 Full score for knowledge of different types 
               
               
                   
                   
                 of lines of credit and identification of any 
               
               
                   
                   
                 lines of credit obtained, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Knowledge of total liabilities 
                 8 
                 Full score for knowledge of the total value 
               
               
                   
                   
                 of current liabilities, zero score otherwise 
               
               
                 Knowledge of options to improve 
                 10 
                 Full score for knowledge of options to 
               
               
                 other types of debt (e.g., auto 
                   
                 improve other types of debt, zero score 
               
               
                 loans, student loans and other 
                   
                 otherwise 
               
               
                 secured and unsecured loans and 
                   
                   
               
               
                 lines of credit) 
               
               
                   
               
            
           
         
       
     
     The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) of the “Protection Planning” category are summarized in the chart below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                   
               
            
           
           
               
               
               
            
               
                 Life insurance needs met? 
                 15 
                 Factor Score = ((amount of current life 
               
               
                   
                   
                 insurance coverage)/(coverage needed to 
               
               
                   
                   
                 meet financial goal(s)) * maximum 
               
               
                   
                   
                 possible score 
               
               
                 Disability insurance needs met? 
                 15 
                 Factor Score = ((amount of current 
               
               
                   
                   
                 disability insurance coverage)/(coverage 
               
               
                   
                   
                 needed to meet financial goal(s)) * 
               
               
                   
                   
                 maximum possible score 
               
               
                 Long term care insurance needs  
                 8 
                 Factor Score = ((amount of current long 
               
               
                 met? 
                   
                 term care insurance coverage)/(coverage 
               
               
                   
                   
                 needed to meet financial goal(s)) * 
               
               
                   
                   
                 maximum possible score 
               
               
                 Knowledge and optimization of 
                 8 
                 Full score for sufficient knowledge and 
               
               
                 homeowners/renters insurance 
                   
                 optimization of current homeowners/ 
               
               
                   
                   
                 renters insurance plan, zero score otherwise 
               
               
                 Knowledge and optimization of 
                 8 
                 Full score for sufficient knowledge and 
               
               
                 auto/boat/rv etc. insurance 
                   
                 optimization of current vehicle insurance 
               
               
                   
                   
                 plan, zero score otherwise 
               
               
                 Knowledge and optimization of 
                 10 
                 Full score for sufficient knowledge and 
               
               
                 health insurance 
                   
                 optimization of current health insurance 
               
               
                   
                   
                 plan, zero score otherwise 
               
               
                 Knowledge and optimization of 
                 6 
                 Full score for sufficient knowledge and 
               
               
                 umbrella/excess coverage policy 
                   
                 optimization of current umbrella/excess 
               
               
                   
                   
                 coverage policy, zero score otherwise 
               
               
                   
               
            
           
         
       
     
     For the “Retirement Planning” category, two alternative sets of factors exist. One set of factors is for those who are not yet retired and another set of factors is for those that are currently retired. The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) for the “Retirement Planning” category for those who are not yet retired are summarized below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                   
               
            
           
           
               
               
               
            
               
                 Contributing the recommend 
                 40 
                 Factor score = ((percent of income being 
               
               
                 percentage of income to 
                   
                 contributed to retirement account)/ 
               
               
                 retirement? 
                   
                 (recommend percentage of income to be 
               
               
                   
                   
                 contributed to retirement account)) * 
               
               
                   
                   
                 maximum possible score for this factor 
               
               
                 Contributing to all possible types 
                 10 
                 Full score if contributing to all available 
               
               
                 of retirement accounts? 
                   
                 types of retirement accounts, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Employer match maximization 
                 8 
                 Full score if taking advantage of maximum 
               
               
                   
                   
                 retirement account contribution matching 
               
               
                   
                   
                 offered by employer, zero score otherwise 
               
               
                 Pension availability and elections  
                 7 
                 Full score if sufficient knowledge about 
               
               
                   
                   
                 any pension available through employer 
               
               
                   
                   
                 and associated elections, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Social security 
                 5 
                 Full score if sufficient knowledge about 
               
               
                   
                   
                 social security eligibility and associated 
               
               
                   
                   
                 benefits, zero score otherwise 
               
               
                   
               
            
           
         
       
     
     The other set of factors and associated maximum factor scores (including how the factor score is determined for each of the factors) for the “Retirement Planning” category for those who are currently retired are summarized below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                 Living within  
                 20 
                 Full score if expenses are equal to or less 
               
               
                 retirement  
                   
                 than the amount being withdrawn from 
               
               
                 income means 
                   
                 retirement accounts, zero score otherwise 
               
               
                 Withdrawing  
                 20 
                 Full score if the rate of amount being 
               
               
                 sustainable  
                   
                 withdrawn from retirement accounts will 
               
               
                 amount 
                   
                 last the projected retirement period, zero 
               
               
                 from retirement  
                   
                 score otherwise 
               
               
                 savings 
                   
                   
               
               
                 Total return vs.  
                 10 
                 Full score if the two different retirement 
               
               
                 straight income 
                   
                 investment strategies were considered, zero 
               
               
                   
                   
                 score otherwise 
               
               
                 Inflation  
                 10 
                 Full score if inflation was considered in 
               
               
                 considerations 
                   
                 retirement planning, zero score otherwise 
               
               
                 Life expectancy  
                 10 
                 Full score if increased life expectancy was 
               
               
                 considerations 
                   
                 considered in retirement planning, zero 
               
               
                   
                   
                 score otherwise 
               
               
                   
               
            
           
         
       
     
     The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) of the “Cash Flow” group are summarized in the chart below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                 Monthly income  
                 40 
                 Full score if monthly income is equal to or 
               
               
                 enough to live 
                   
                 exceeds current expenses, zero score 
               
               
                 current life style 
                   
                 otherwise 
               
               
                 Debt pay off plan 
                 20 
                 Full score if no debt or a plan to pay off 
               
               
                   
                   
                 debt is in place, zero score otherwise 
               
               
                 Auto payment 
                 10 
                 Full score if automatic payment plan of 
               
               
                   
                   
                 expenses has been considered, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Systematic saving 
                 10 
                 Full score if a systematic saving plan has 
               
               
                   
                   
                 been established, zero score otherwise 
               
               
                   
               
            
           
         
       
     
     The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) of the “Estate Planning” group are summarized in the chart below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                   
               
            
           
           
               
               
               
            
               
                 When was the last  
                 5 
                 Full score for knowledge of last time  
               
               
                 time the estate 
                   
                 when the estate plan was reviewed, zero  
               
               
                 plan was  
                   
                 score otherwise 
               
               
                 reviewed? 
                   
                   
               
               
                 Estate plan  
                 30 
                 Full score for having appropriate estate 
               
               
                 documents in  
                   
                 planning documents in place, zero score 
               
               
                 place (e.g.,  
                   
                 otherwise 
               
               
                 will/trust, 
                   
                   
               
               
                 guardianship, 
                   
                   
               
               
                 executors/trustees,  
                   
                   
               
               
                 durables power 
                   
                   
               
               
                 of attorney,  
                   
                   
               
               
                 healthcare  
                   
                   
               
               
                 directive, etc.) 
                   
                   
               
               
                 Beneficiary  
                 12 
                 Full score for having considered 
               
               
                 designation  
                   
                 beneficiary designation outside of estate 
               
               
                 outside of 
                   
                 planning documents, zero score  
               
               
                 estate planning  
                   
                 otherwise 
               
               
                 documents 
                   
                   
               
               
                 Special needs 
                 3 
                 Full score for having considered special 
               
               
                   
                   
                 needs in estate planning, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Forms of property  
                 3 
                 Full score for having considered forms  
               
               
                 ownership as 
                   
                 of ownership as estate planning, zero  
               
               
                 will substitute 
                   
                 score otherwise 
               
               
                 Charitable gifting 
                 3 
                 Full score for having considered  
               
               
                   
                   
                 charitable gifts in estate planning, zero  
               
               
                   
                   
                 score otherwise 
               
               
                 Planning for  
                 3 
                 Full score for having considered liquidity 
               
               
                 liquidity 
                   
                 in estate planning, zero score otherwise 
               
               
                 Planning for  
                 3 
                 Full score for having considered  
               
               
                 incapacity 
                   
                 incapacity in estate planning, zero score  
               
               
                   
                   
                 otherwise 
               
               
                 Funeral  
                 2 
                 Full score for having funeral arrangement 
               
               
                 arrangement  
                   
                 contracts in place, zero score otherwise 
               
               
                 contracts 
                   
                   
               
               
                 Final  
                 2 
                 Full score for having final instructions in 
               
               
                 instructions 
                   
                 place, zero score otherwise 
               
               
                 Informational  
                 2 
                 Full score for having informational sheet  
               
               
                 sheet (e.g., 
                   
                 in place, zero score otherwise 
               
               
                 document with  
                   
                   
               
               
                 professional 
                   
                   
               
               
                 emergency  
                   
                   
               
               
                 contacts,  
                   
                   
               
               
                 doctors, bank 
                   
                   
               
               
                 information,  
                   
                   
               
               
                 location &amp; 
                   
                   
               
               
                 combinations  
                   
                   
               
               
                 for safe, etc.) 
                   
                   
               
               
                 Location of  
                 2 
                 Full score for documenting locations of 
               
               
                 hidden assets 
                   
                 hidden assets, zero score otherwise 
               
               
                 documented? 
               
               
                   
               
            
           
         
       
     
     The factors and associated maximum factor scores (including how the factor score is determined for each of the factors) of the “Tax” category are summarized in the chart below. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                   
               
            
           
           
               
               
               
            
               
                 Tax refund  
                 2 
                 Full score if can identify whether taxes 
               
               
                 status 
                   
                 were owed or refunded last tax year, zero 
               
               
                   
                   
                 score otherwise 
               
               
                 W-4  
                 2 
                 Full score reviewing tax withholding to 
               
               
                 withholding 
                   
                 determine if appropriate amount of taxes is 
               
               
                 review 
                   
                 being withheld from income, zero score 
               
               
                   
                   
                 otherwise 
               
               
                 Retirement  
                 5 
                 Full score reviewing tax status of 
               
               
                 contributions - 
                   
                 retirement contributions, zero score 
               
               
                 deductible or  
                   
                 otherwise 
               
               
                 non-deductible 
                   
                   
               
               
                 Maximized all  
                 5 
                 Full score for attempting to maximize tax 
               
               
                 tax shelters? 
                   
                 shelters, zero score otherwise 
               
               
                 Tax loss  
                 2 
                 Full score for analyzing tax loss harvesting, 
               
               
                 harvesting 
                   
                 zero score otherwise 
               
               
                 Deductions,  
                 15 
                 Full score for reviewing possible 
               
               
                 credits, and  
                   
                 deductions, credits and other tax reduction 
               
               
                 extra 
                   
                 opportunities, zero score otherwise 
               
               
                 Accelerating  
                 2 
                 Full score for considering acceleration 
               
               
                 deductions/ 
                   
                 strategies with respect to 
               
               
                 postponing  
                   
                 deductions/income for tax purposes, zero 
               
               
                 income vs. 
                   
                 score otherwise 
               
               
                 accelerating  
                   
                   
               
               
                 income/ 
                   
                   
               
               
                 postponing 
                   
                   
               
               
                 deductions 
                   
                   
               
               
                 Gifting for  
                 2 
                 Full score for considering tax 
               
               
                 estate  
                   
                 considerations of gifting for estate planning 
               
               
                 planning  
                   
                 purposes, zero score otherwise 
               
               
                 reasons 
                   
                   
               
               
                 Tax efficiency  
                 3 
                 Full score for considering tax 
               
               
                 of debt &amp; 
                   
                 considerations of debt and investment 
               
               
                 investment  
                   
                 holdings, zero score otherwise 
               
               
                 holdings 
                   
                   
               
               
                 Alternative  
                 2 
                 Full score for considering alternative 
               
               
                 Minimum Tax 
                   
                 minimum tax, zero score otherwise 
               
               
                   
               
            
           
         
       
     
     Additionally, factors for the “Funding the Nest” factor group include the following factors in the following chart. The following chart also shows the corresponding maximum factor score and how the factor score is determined for the factor. If the formula shown in “How Factor Score is Determined” results in a score larger than the associated maximum factor score, the factor score of the associated factor is capped at the maximum factor score. 
     
       
         
           
               
               
               
             
               
                   
               
               
                   
                 Maximum 
                   
               
               
                   
                 Factor 
                   
               
               
                 Factor 
                 Score 
                 How Factor Score is Determined 
               
               
                   
               
             
            
               
                   
               
            
           
           
               
               
               
            
               
                 Flexibility/ 
                 50 
                 Factor score = (maximum score for this 
               
               
                 Liquidity  
                   
                 factor) * (percentage of assets that are 
               
               
                 of assets 
                   
                 liquid and that will be used to fund monthly 
               
               
                 being used  
                   
                 income need in future) 
               
               
                 to fund  
                   
                   
               
               
                 monthly 
                   
                   
               
               
                 income need 
                   
                   
               
               
                 Asset  
                 100 
                 Factor score = (maximum score for this 
               
               
                 diversification  
                   
                 factor) * (percentage of assets that are not 
               
               
                 (e.g., no more 
                   
                 concentrated in one or more assets that 
               
               
                 than 10% in  
                   
                 represent more than 10% of total amount 
               
               
                 any single  
                   
                 saved for financial goal(s)) 
               
               
                 asset used 
                   
                   
               
               
                 to fund  
                   
                   
               
               
                 financial  
                   
                   
               
               
                 goal(s)) 
                   
                   
               
               
                 Amount  
                 100 
                 Factor score = (maximum score for this 
               
               
                 accumulated  
                   
                 factor) * (percentage of assets necessary to 
               
               
                 to fund 
                   
                 achieve stated financial goal(s), currently 
               
               
                 monthly  
                   
                 (if retired) or going forward (if not yet 
               
               
                 income need 
                   
                 retired)) 
               
               
                 Monthly  
                 50 
                 Factor score = (maximum score for this 
               
               
                 housing cost  
                   
                 factor) * (1 − ((monthly housing costs/ 
               
               
                 ratio (i.e., 
                   
                 monthly gross income)/28%)) 
               
               
                 staying  
                   
                   
               
               
                 within 28%  
                   
                   
               
               
                 recommended 
                   
                   
               
               
                 limit spent on  
                   
                   
               
               
                 housing costs  
                   
                   
               
               
                 vs. income)  
                   
                   
               
               
                 (e.g., can be  
                   
                   
               
               
                 negative value) 
                   
                   
               
               
                 Consumer debt  
                 50 
                 Factor score = (maximum score for this 
               
               
                 ratio (i.e.,  
                   
                 factor) * (1 − ((monthly debt costs/ 
               
               
                 staying 
                   
                 monthly gross income)/28%)) 
               
               
                 within 20%  
                   
                   
               
               
                 recommended  
                   
                   
               
               
                 limit spent on  
                   
                   
               
               
                 debt costs vs.  
                   
                   
               
               
                 income) (e.g.,  
                   
                   
               
               
                 can be negative  
                   
                   
               
               
                 value) 
                   
                   
               
               
                 Trajectory of  
                 150 
                 Factor score = (maximum score for this 
               
               
                 assets, given  
                   
                 factor) * (a percentage of time a simulation 
               
               
                 current 
                   
                 result achieved the financial goal(s) in an 
               
               
                 contribution  
                   
                 indicated portion of the simulations) [e.g, 
               
               
                 rate 
                   
                 see process of FIG. 4] 
               
               
                   
               
            
           
         
       
     
     Below is an example calculation of a financial evaluation score for a hypothetical individual, Fred, using the examples of factors discussed above. 
     Fred is 44 years old and divorced with 2 children. His hopes to retire at age 60 with a net monthly income of $9,000 and wants to leave his two children at least $500,000 each. His finances are summarized in the chart below. 
     
       
         
           
               
               
             
               
                   
               
               
                 Item 
                 Amount 
               
               
                   
               
             
            
               
                 Gross monthly income 
                  $15,000 
               
               
                 Monthly housing cost 
                  $4,850 
               
               
                 Monthly consumer debt cost 
                  $3,200 
               
               
                 Monthly savings 
                    $500 
               
               
                 401(k) account value 
                 $125,000 
               
               
                 Roth IRA value 
                  $2,000 
               
               
                 Brokerage account value 
                  $5,000 
               
               
                 Home value 
                 $750,000 
               
               
                 Mortgage balance 
                 $850,000 
               
               
                 Life Insurance need/current coverage 
                 $1.7 million/currently no policy 
               
               
                 Disability insurance need/coverage 
                 $8,000 per month/currently no  
               
               
                   
                 policy 
               
               
                   
               
            
           
         
       
     
     Below is a chart summarizing Fred&#39;s factor scores for the “Goal Setting” category in the “Building the Nest” grouping. 
                                         Factor   Reason for        Factor   Score   the Factor Score                  Identify financial goals (e.g.,    5 out of   Identified desired financial        college, retirement, second home,    5*   goals       wedding, purchase car, etc.)               List of Assets and Liabilities   10 out of   Identified current assets            10*   and liabilities       Cost of goal(s)    0 out of   Not able to identify costs             5*   associated with desired                financial goals       Time period to achieve goal(s)    5 out of   Identified desired time             5*   period to achieve desired                financial goals       Complete risk tolerance survey   15 out of   Completed the risk        (e.g., risk tolerance survey similar   15*   tolerance survey       to ones offered by FinaMetrica Pty               Limited to identify desired risk               tolerance and investment               tolerance)               Appropriate investment/saving    0 out of   Has not considered        vehicles considered and    5*   appropriate investment/       established? (e.g., checking       savings vehicles       account, money market account,               certificates of deposit, mutual               funds, savings account, stocks,               bonds, annuities, IRA, 401(k) or               other retirement plan, etc.)               Identification of sources for    0 out of   Did not research and        funding (e.g., cash, retirement,    5*   consider all indicated        savings, inheritance, etc.) financial       sources for funding        goal(s).       financial goals               *subject to scaling multiplier            
The total of the “Goal Setting” factors above before scaling is 35. However, Fred cannot cover his total monthly expenses with liquid assets and consequently his liquidity scaling multiplier is 50%. Thus his score for the “Goal Setting” category is (0.5)(35)=17.5 out of 50. However, for the above factors that Fred has received zero, Fred would be provided with an opportunity to increase his factor score using provided information/tools/guidance/referrals (e.g., see the process of  FIG. 3 ).
 
     Below is a chart summarizing Fred&#39;s factor scores for the “Investments” category in the “Building the Nest” grouping. 
                                         Factor   Reason for        Factor   Score   the Factor Score                  Making current contributions, net   10 out of   Contributed to a financial        of withdrawals in the last 90 days,   10*   vehicle in order to achieve        to meet financial goal(s)       financial goals       Diversification of strategy    0 out of   Diversification of            10*   investment styles and               types have not been                considered       Own non-correlated/alternatives     0 out of   Investment held in single        as a portion of overall portfolio   10*   stock       Auto-balance    0 out of    Investments are not             5*   re-balanced periodically                to desired risk profile       Auto save    0 out of    No automatic investment             5*   plan       Liquidity needs consideration    5 out of    Liquidity needs have been             5*   considered with respect to                investment strategies       Time horizon consideration    5 out of    Time horizons have been             5*    considered with respect to                investment strategies       Types of investments (e.g.,    0 out of    Different types of available        income, growth, real estate)    5*   investments have not been        consideration       considered with respect to               investment strategies       Diversification of investment    0 out of    Diversification of assets        vehicles    5*   has not been accomplished       Tax consequences consideration    0 out of    Tax effects have not been             5*   considered with respect to                investment strategies       Dollar cost averaging    5 out of    Dollar cost averaging        consideration    5*   investment strategy has                been considered with                respect to investment                strategies               *subject to scaling multiplier            
The total of the “Investment” factors above before scaling is 25. Although Fred has a recommended risk allocation of 70%, Fred has a current risk allocation of 100% because all of his investments are in a single risky stock. His risk allocation scaling multiplier is thus=1−((difference between the recommended risk allocation and the current risk allocation)/(recommended risk allocation))=1−((100%-70%)/70%)=1−43%=57%. Thus his score for the “Investment” category is (0.57)(25)=14.25 out of 70.
 
     Below is a chart summarizing Fred&#39;s factor scores for the “Debt Optimization” category in the “Building the Nest” grouping. 
                                         Factor   Reason for        Factor   Score   the Factor Score                  Knowledge and identification of    0 out of    Incomplete knowledge of        mortgage structure/ mortgage    5   different types of        accelerated payoff options       mortgages and inability                to identify the type of                mortgage held       Knowledge of credit card usage    5 out of    Knowledge of credit card        optimization    5   mechanics and the ability                to identify the details of               currently held credit card       Knowledge of debt cost reduction   10 out of   Knowledge of different        strategies (e.g., strategies to lower   10   types of debt cost        interest rates, etc.)       reduction strategies       Review of credit score    0 out of    Does not know credit             7   score       Knowledge of lines of credit    5 out of    Knowledge of different             5   types of lines of credit and                no lines of credit obtained       Knowledge of total liabilities    8 out of    Knowledge of the total             8   value of current liabilities       Knowledge of options to improve    0 out of   Incomplete knowledge        other types of debt (e.g., auto   10   of options to improve        loans, student loans and other       other types of debt       secured and unsecured loans and               lines of credit)                    
The total of the “Debt Optimization” factor scores is 28 out of 50.
 
     Below is a chart summarizing Fred&#39;s factor scores for the “Protection Planning” category in the “Building the Nest” grouping. 
                                         Factor   Reason for        Factor   Score   the Factor Score                  Life insurance needs met?    0 out of   No life insurance but            15   need exists       Disability insurance needs met?    0 out of   No disability insurance            15   but need exists       Long term care insurance needs    0 out of   No long term insurance        met?    8   but need exists       Knowledge and optimization of    8 out of   Sufficient knowledge and        homeowners/renters insurance    8   optimization of current                homeowners/renters                insurance plan       Knowledge and optimization of    8 out of   Sufficient knowledge and        auto/boat/rv etc. insurance    8   optimization of current                vehicle insurance plan       Knowledge and optimization of   10 out of   Sufficient knowledge and        health insurance   10   optimization of current                health insurance plan       Knowledge and optimization of     0 out of   Insufficient knowledge        umbrella/excess coverage policy    6   and optimization of current                umbrella/excess coverage                policy                    
The total of the “Protection Planning” factor scores is 26 out of 70.
 
     For the “Retirement Planning” category, because Fred has not retired yet, the set of factors for those that are not currently retired is used. Below is a chart summarizing Fred&#39;s factor scores for the “Retirement Planning” category in the “Building the Nest” grouping. 
                                         Factor           Factor   Score   Reason for the Factor Score                  Contributing the    12 out of   Factor score = (3%/10%) * 40       recommend               percentage of income    40           to retirement?               Contributing to all     0 out of   Not contributing to all available        possible types   10   types of retirement accounts       of retirement accounts?               Employer match     0 out of    Not taking advantage of maximum       maximization    8   retirement account contribution                matching offered by employer       Pension availability     7 out of    Sufficient knowledge about any        and elections    7   pension available through employer                and associated elections       Social security    5 out of   Sufficient knowledge about social             5   security eligibility and associated                benefits                    
The total of the “Retirement Planning” factor scores is 24 out of 70.
 
     Below is a chart summarizing Fred&#39;s factor scores for the “Cash Flow” category in the “Building the Nest” grouping. 
                                         Factor           Factor   Score   Reason for the Factor Score                  Monthly income     0 out of   Monthly income less than current monthly       enough to live   40   expenses       current life style               Debt pay off plan   20 out of   Debt payment plan in place           20           Auto payment   10 out of   Automatic payment plan of expenses has           10   been considered       Systematic saving   10 out of    Systematic saving plan has been           10   established                    
The total of the “Cash Flow” factor scores is 40 out of 80.
 
     Below is a chart summarizing Fred&#39;s factor scores for the “Estate Planning” category in the “Building the Nest” grouping. 
                                         Factor   Reason for        Factor   Score   the Factor Score                  When was the last time the estate    0 out of    No knowledge of last        plan was reviewed?    5   time when the estate               plan was reviewed       Estate plan documents in place   30 out of   Appropriate estate        (e.g., will/trust, guardianship,   30   planning documents        executors/trustees, durables power       in place       of attorney, healthcare directive,               etc.)               Beneficiary designation outside of   12 out of   Considered beneficiary        estate planning documents   12   designation outside               of estate planning                documents       Special needs    3 out of    Considered special needs             3   in estate planning       Forms of property ownership as    3 out of    Considered forms of        will substitute    3   ownership as estate               planning       Charitable gifting    3 out of    Considered charitable             3   gifts in estate planning       Planning for liquidity    3 out of    Considered liquidity in             3   estate planning       Planning for incapacity    0 out of    Did not consider             3   incapacity               in estate planning       Funeral arrangement contracts    0 out of    Funeral arrangement             2   contracts not in place       Final instructions    0 out of    Final instructions not             2   in place       Informational sheet (e.g.,    0 out of    Informational sheet not        document with professional    2   in place       emergency contacts, doctors, bank               information, location &amp;               combinations for safe, etc.)               Location of hidden assets    2 out of    Locations of hidden        documented?    2   assets documented                    
The total of the “Estate Planning” factor scores is 56 out of 70.
 
     Below is a chart summarizing Fred&#39;s factor scores for the “Tax” category in the “Building the Nest” grouping. 
                                         Factor           Factor   Score   Reason for the Factor Score                  Tax refund status    2 out of    Could identify whether taxes were owed             2   or refunded last tax year       W-4 withholding     2 out of    Reviewed tax withholding to determine        review    2   if appropriate amount of taxes is being               withheld from income       Retirement     5 out of    Reviewed tax status of retirement       contributions -    5   contributions       deductible or                non-deductible               Maximized all tax     5 out of    Attempted to maximize tax shelters       shelters?    5           Tax loss     2 out of   Analyzing tax loss harvesting       harvesting    2           Deductions,    15 out of    Reviewing possible deductions, credits        credits, and extra   15   and other tax reduction opportunities       Accelerating     2 out of    Considered acceleration strategies with       deductions/    2   respect to deductions/income for tax       postponing        purposes       income vs.               accelerating                income/postponing               deductions               Gifting for estate     2 out of    Considered tax considerations of gifting        planning reasons    2   for estate planning purposes       Tax efficiency of     0 out of    Did not consider tax considerations of        debt &amp;    3   debt and investment holdings       investment                holdings               Alternative     0 out of    Did not consider alternative minimum        Minimum Tax    2   tax strategies                    
The total of the “Tax” factor scores is 35 out of 40.
 
     Thus the combined scores for the “Building the Nest” factors is 240.75 
     Additionally, factors for the “Funding the Nest” factor group include the following factors. 
                                         Factor   Reason for        Factor   Score   the Factor Score                  Flexibility/Liquidity of        50 out of   Factor score = (maximum        assets being used to fund     50   score for this factor) *        monthly income need       (percentage of assets that                are liquid and that will be                used to fund monthly               income need in future) =                50 * 100%       Asset diversification (e.g.,        50 out of   Factor score = (maximum        no more than 10% in any    100   score for this factor) *        single asset used to fund        (percentage of assets that        financial goal(s))       are not concentrated in one                or more assets that                represent more than 10%                of total amount saved for                financial goal(s)) =                100 * 50%       Amount accumulated to        5 out of   Factor score = (maximum        fund monthly income    100   score for this factor) *        need       (percentage of assets                necessary to achieve stated                financial goal(s), currently               (if retired) or going                forward (if not yet                retired)) = 100 * 5%       Monthly housing cost    −4.52 out of    Factor score = (maximum        ratio (i.e., staying within     50   score for this factor) * (1 −        28% recommended       ((monthly housing        limit spent on housing       costs/monthly gross                income)/28%)) = 50 * (1 −       costs vs. income) (e.g.,        (($4,580/$15,000)/28%))       can be negative value)               Consumer debt ratio    −3.33 out of    Factor score = (maximum        (i.e., staying within 20%     50   score for this factor) * (1 −        recommended limit spent        ((monthly debt        on debt costs vs. income)        costs/monthly gross        (e.g., can be negative        income)/20%)) = 50 *        value)       (1−(($3,200/$15,000)/20%))       Trajectory of assets,      34.5 out of   Factor score = (maximum        given current    150   score for this factor) * (a        contribution rate       percentage of time a                simulation result achieved                the financial goal(s) in 80%               of the simulations) =                150 * 23%                    
Thus the combined scores for the “Funding the Nest” factors is 131.65 and the combined total financial evaluation score is 372.4 or rounded to 372.
 
     After receiving the financial evaluation score of 372, Fred is presented with opportunities to improve his score. For example, using the process of  FIG. 6 , Fred is presented with a list of recommendations. The most important action to improve his score has been identified as increasing his annual savings by at least $18,000, which would improve his financial evaluation score by 58 points. Other actions presented to Fred include (in order of priority), adjusting his retirement time horizon (32 point increase in score), beginning a debt reduction plan (25 point increase in score), obtaining sufficient life insurance (12 point increase in score), among other suggested actions. 
     Although the foregoing embodiments have been described in some detail for purposes of clarity of understanding, the invention is not limited to the details provided. There are many alternative ways of implementing the invention. The disclosed embodiments are illustrative and not restrictive.