Abstract:
A method including establishing a commission-free fee-based brokerage account for a client and maintaining a balance between the account&#39;s fee, its investment activity and services received, and compensation to a financial advisor of the client. Customized flat fee pricing can be calculated based on investment objectives, risk tolerances, asset mix, asset size, expected trading patterns, utilization of other firm services and the client account relationship (the existence of other accounts of that client with the firm). Systems calculate and recommend a fee to the financial advisor, who then negotiates with the client and determines a final fee. This dynamic pricing process includes a compensation adjustment to the financial advisor under certain pricing and trading scenarios.

Description:
This application claims the benefit of prior copending U.S. Provisional Patent Application Ser. No. 60/232,353, filed Sep. 14, 2000. 

   FIELD OF THE INVENTION 
   This invention relates to methods and systems for doing business by a financial services firm and its representatives who provide investment advice and other brokerage services for a single asset-based fee. 
   BACKGROUND OF THE INVENTION 
   Financial services firms and their representatives provide investment advice, execute investment transactions, maintain investment accounts and perform a variety of financial planning and other services for the firm&#39;s clients. All of these transactions are governed by regulations designed to protect the client, the financial services firm and the representatives (“financial advisors”). An important factor in risk assignment is the length of the period of time for a particular risk that is appropriate for the particular client. 
   The amount of trading in a particular account is an important factor that the client and the financial advisor must both keep in mind. Since commissions are paid on transactions the client is not helped by unnecessary trading in its account. On the other hand, a reasonable amount of trading is necessary to maintain a balance between the client&#39;s risk tolerance and account growth potential. Typically, commissions are paid on individual trades. These commissions are set at rates that reflect the expertise available to the client as investment advice and are typically negotiated for each trade. Thus financial services firms that have established research departments to advise clients will charge higher commissions than firms (so-called “discount brokers”) that merely execute transactions without providing investment advice. 
   For clients with substantial investment portfolios that are actively traded, annual brokerage fees may be charged in lieu of individual trade commissions. Such a commission-free system requires certain safeguards. The appropriate clients have to be identified and the system has to be explained candidly to the identified clients. The amount of trading by the client has to be limited in some way so that excessive trading is not encouraged by the absence of individual transaction fees. Typically, this is accomplished by placing limits on the number of commission-free transactions. 
   In prior systems, fixed fees are structured for a particular asset class within an account. Thus, there would be one fixed fee for stock securities, another for fixed investment securities such as bonds, and yet another for cash or money market funds, etc. This array of fees was believed to be necessary in order to allow for appropriate pricing of the account, i.e., such predictability was deemed necessary to properly price the services. 
   However, the prior systems lack a method for determining a single pricing structure for financial advisory services which cuts across the various investment classes and which does not vary greatly from one billing period to another despite variations in the asset classes held at any particular point in time, but instead yields a flat fee designed to be appropriate over an extended period of time. The prior systems lack a method that allows appropriate pricing of a service that will permit the client to trade all classes of investments appropriate for the client in a single account, without having to incur fees that lack consistency over extended periods of time since they are subject to variations in the asset classes held in the account. Furthermore, when the fees are different for each asset class, and those fees are blended (as in prior systems) to yield a flat fee for the account, the resulting blended fee may not reflect the actual level of transactions taking place or the services actually being provided for the account. 
   SUMMARY OF THE INVENTION 
   The present invention is a method for doing business by a financial services firm providing a traditional brokerage account that includes commission-free transaction processing, investment advice and services for a flat fee that remains in effect for a predetermined period of time, typically one year. The invention concerns a method for selecting appropriate clients and providing virtually unlimited commission-free trading across all asset classes with a compensation component for the financial advisor servicing the account that encourages the establishment of an appropriate annual fee. It should be understood that although the invention is described herein in terms of an annual fee, the period of time for which the fee is effective could vary, i.e., it could be more or less than a year, and that the fee could be structured to cover a defined level of services. One of the important concepts, however, is that the fee is not directly linked to a particular class or classes of assets. 
   The selection of appropriate clients is accomplished through a complex set of criteria designed to identify clients who would benefit from the invention by virtue of their investment portfolio and their investment personality. Investment personality is a term defined to encompass the preferences of the client. These preferences include the client&#39;s investment objectives and the need for transactions, advice and services required to meet those objectives. 
   The establishment of an appropriate fee is accomplished by a process that includes a review and assessment of the client&#39;s investment objectives, investment portfolio, past trading activity and service requirements, and those expected in the future. This information is gathered by the method and system of this invention and processed to arrive at a recommended fee to present to the client. The recommended fee may then be adjusted upward or downward within a wide range, based on further discussions between the financial advisor and the client. Should the fee be adjusted below a certain level, at which the difference between the fee and the account&#39;s transaction and service requirements do not meet the firm&#39;s profitability requirements, the invention includes an adjustment of, or a charge back to, the financial advisor&#39;s compensation. As a result, the financial advisor has a much broader range within which to price the relationship than would otherwise be possible without the compensation adjustment. 
   One of the novelties in this invention resides in part on this feedback to the financial advisor&#39;s compensation, making him or her responsible for the maintenance of the balance between client assets, fees assessed, transactions and services provided and firm profitability. 

   
     BRIEF DESCRIPTION OF THE DRAWINGS 
       FIG. 1  depicts the overall procedure of this invention for establishing a new brokerage account for a client. 
       FIG. 2  depicts the stages of this invention to be undertaken by a financial advisor in the determination of the relationship of the client account to other accounts for the client held by the firm and for establishing a negotiated fee-based relationship with the client. 
       FIG. 3  depicts the stages for approving a client application for the new flat fee brokerage account. 
       FIG. 4  illustrates the services provided by the new flat fee brokerage account of this invention. 
       FIG. 5  portrays the accounting process for the new flat fee brokerage account. 
       FIG. 6  represents the compensation process for the new flat fee brokerage account. 
       FIG. 7   a  shows in more detail the steps to be taken by the financial advisor in setting up a flat fee brokerage account. 
       FIG. 7   b  shows the steps of the method involved in approving the account using the brokerage computer system of this invention. 
       FIG. 7   c  shows the steps of the method for accounts that are technically below the minimum portfolio size of eligible investments. 
       FIG. 8  is a flow chart showing the financial advisor&#39;s charge flow where typical charges are $14 per transaction. 
       FIG. 9  is a schematic diagram of a networked brokerage computer system of this invention. 
       FIG. 10  illustrates the factors which may be evaluated when establishing the fee for the new flat fee brokerage account in accordance with the invention. 
   

   DETAILED DESCRIPTION OF THE INVENTION 
   The overall procedure for establishing a new flat fee brokerage account for a client is shown in  FIG. 1 . Initially, a profile of the client is established at step  1  by requesting the client to respond to a questionnaire. On the basis of this profile, including information such as client investment objectives, client risk tolerance, client assets with a description of asset allocation, types of trades, and profitability ranking parameters, a recommended fee is established for discussion with the client, using an algorithmic evaluation. The final flat fee is the result of negotiations between the financial advisor and the client. A determination is made at step  2  whether to approve the account. If approved, services are provided to the client at step  3 . The charges incurred by the account are then processed in step  4  and proper accounting and compensation of the responsible financial advisor is provided at step  5 . 
   Compensation of the financial advisor may require that the financial advisor be charged a specific dollar amount for each transaction, subject to the fee level of the account, the total revenue derived from the client relationship and other information that may be processed through an algorithm, resulting in different types of financial advisor compensation adjustments. Subject to the profitability characteristics of the account, the method and system may assess a transaction charge to the financial advisor and/or adjust the financial advisor&#39;s level of compensation. For example, a $10-$20 charge may be assessed to the financial advisor for each non-fixed income transaction if the negotiated fee is below a certain level (e.g., less than 75 basis points (0.75%)), and the revenue generated from the relationship with all of the client&#39;s accounts of eligible assets is below a certain dollar threshold (e.g. less than $2,500 per quarter). Subject to the actual fee associated with an account and the actual total revenue associated with the relationship, the $10 to $20 charge may be increased or decreased, and may be applied or waived for different types of transactions. Additionally, the financial advisor&#39;s compensation level (i.e., the percentage of client&#39;s flat fee that is paid to the advisor) may also be reduced by these factors, with or without the transaction assessment, subject to the profitability characterization of the account and of the relationship. 
     FIG. 2  depicts the stages to be undertaken by a financial advisor in creating a client profile and establishing the relationship of the client account to other accounts of the client held by the firm, and for establishing an appropriate fee-based relationship with the client (Box  1 ). In particular, to set up the account (Box  50 ), holdings of the client are reviewed (Box  6 ) and a minimum holding size, for example $50,000 of eligible assets, is required. The client&#39;s objectives and sophistication are reviewed to determine suitability (Box  7 ). A flat fee is then established to encompass essentially all trading activity and other account services (Box  8 ), as described in further detail herein below in connection with  FIG. 10 . In a preferred embodiment, a questionnaire will be provided to the client (Box  9 ). The questionnaire examines the client&#39;s investment objectives, investing time frame, return and risk profile, and asset allocation guidelines. 
   The client&#39;s investment objectives include client goals, such as preservation of capital, asset growth with or better than inflation, current income, or asset appreciation. 
   The investing time frame details the time period at which the funds are to be invested. The return and risk profile defines the client&#39;s tolerance to a risk in pursuit of the returns of the investment. The returns are achieved by long-term investment through tolerance to short-term fluctuations of the value of the investment. 
   The asset allocation guidelines are indicators of the client&#39;s desired distribution of assets to certain investment classes. The allocation guidelines also contain the relative portion of assets to be invested in the new flat fee brokerage account with respect to the client&#39;s total assets. 
   The questionnaire becomes the basis for a discussion to determine applicability of the new flat fee brokerage account to the client&#39;s objectives. The financial advisor and the client discuss the client&#39;s investment objectives, risk tolerance, and existing asset allocation, to analyze and provide a recommended asset allocation (Box  10 ). For a previously existing client, for whom much of the information is already available, the process may be shortened by relating the client&#39;s existing accounts to the present invention. In such a case, nothing more may be required than establishing a negotiated fee for the new relationship (Box  12 ). 
   Once the account set up process (Box  50 ) is completed for a new client or for a previously existing client, the flat fee brokerage account can be related to other accounts of the client at the firm in order to take advantage of the flat fee aspect of the new brokerage account (Box  60 ). 
   The new flat fee brokerage account may require minimum asset levels (for example $50,000). If the new flat fee brokerage account is being established with asset levels less than the required minimum asset level ($50,000), a new client must establish other accounts with the firm or an existing client must identify existing accounts at the firm. The existing accounts or newly established accounts are then related (Boxes  11  and  13 ) to the new flat fee brokerage account established pursuant to this invention in order to take advantage of the flat fee aspect of the account and to surpass the minimum asset requirement level. 
   Upon establishment of the new flat fee brokerage account with the appropriate account relationships (Box  60 ), the financial advisor and the client may negotiate to establish a relationship based fee (Box  70 ) for the new flat fee brokerage account and the related accounts. The fee includes a minimum account fee, and defines a term or duration for the account. For instance, the new flat fee brokerage account may have a term of one year, with a specific maximum number of transactions included in the fee at a specific asset level. Upon completion of the negotiation of the flat fee amount and the term, the negotiated flat fee is recorded (Box  12 ). 
   Referring now to  FIG. 3 , the procedures involved in the step of account approval (Box  2 ) will now be discussed. Once a financial advisor has established the client relationship and negotiated the fee of the new flat fee brokerage account pursuant to this invention, the documentation is transferred to a brokerage operations manager for approval (not shown). The brokerage operations manager must verify client suitability (Box  100 ). For an existing client, the brokerage operations manager inspects the client account database (Box  102 ) to review the client&#39;s transaction history, income, financial resources and previously recorded investment objectives to insure suitability. However, for a new client, the brokerage operations manager reviews (Box  104 ) the client&#39;s responses on the account agreement (Box  122 ) and the questionnaire that established the client&#39;s investment objectives and desired asset allocation, with emphasis on the new flat fee brokerage account&#39;s position in the client&#39;s total asset allocation. 
   The brokerage operations manager then reviews (Box  110 ) the assets being deposited into the new flat fee brokerage account. If the amount of assets being deposited to the new flat fee brokerage account is less than the required minimum asset level ($50,000), the brokerage operations manager reviews any related accounts of the client to insure that the minimum asset level is met or exceeded in the aggregate. If the minimum asset level is not either being deposited to the new flat fee brokerage account or found in the related account(s), the brokerage operations manager must seek (Box  114 ) special approval to open the new client account. 
   To complete the account approval procedure (Box  2 ), the brokerage operations manager must verify (Box  120 ) the terms of any agreement documents submitted. 
   The account agreement (Box  122 ) details the duration of the flat fee for the new flat fee brokerage account, the initial asset level, and any existing accounts to be related to the new flat fee brokerage account established pursuant to this invention. For a new client, the account agreement details the client&#39;s income, net worth, investment experience and investment objectives. The options agreement (Box  124 ) defines the types and terms of any options trading allowed in the account, and the margin agreement (Box  126 ) defines the terms of any investment transactions through the new flat fee brokerage account that are to be executed “on margin”. 
   Upon account approval (Box  2 ), the firm can then provide to the client the services associated with the new flat fee brokerage account, as shown at step  3  in  FIG. 1 , and illustrated in further detail in  FIG. 4 . The services provided by the new flat fee brokerage account may include cash and credit services (Box  200 ), on-line transactions (Box  210 ), financial planning (Box  220 ), retirement planning (Box  230 ), and special account status reports (Box  240 ). 
   The cash and credit services (Box  200 ) may include cash accounts (Box  202 ) as a checking account, money market account, or savings account, credit privileges (Box  204 ) such as a credit card, and a money market sweep (Box  206 ), which places any excess cash funds in an interest bearing money market account automatically. 
   The on-line transactions (Box  210 ) allow the client to have access to the new flat fee brokerage account through data communication media such as the Internet. This allows the client to institute trading of stocks and other investment vehicles (Box  212 ) without direct communication with a financial advisor. Any such on-line trading is confirmed with on-line access to account statements (Box  214 ). Also, the client can pay bills or move money between accounts directly though this on-line service (not shown). 
   The financial planning (Box  220 ) and retirement planning (Box  230 ) allow the client to avail himself or herself of expert assistance to review his or her investment objectives and asset allocations to meet specific short term financial goals (e.g., buying a house) or longer term financial goals such as saving for a child&#39;s education or for retirement. The specialized reporting (Box  240 ) provides periodic account reports (Box  245 ), which not only itemize the asset values and transactions for a period (monthly, quarterly, annually), but also provide realized and unrealized investment gains and/or losses. 
   The charges incurred by the client that pertain to the new flat fee brokerage account are processed through the financial services firm&#39;s account system (step  4  of  FIG. 1 ) as detailed in  FIG. 5 . Based upon the negotiated fee (Box  300 ), established as described above, the accounting system creates the initial billing (Box  302 ) and the quarterly (Box  304 ) billing. The accounting system then creates the contribution billing (Box  310 ) for which the client is responsible. The contribution billing includes fees incurred for the deposit of additional assets into the new flat fee brokerage account (Box  312 ), after initial or quarterly billing is completed, and the fees incurred by the sale through the new flat fee brokerage account of assets ineligible under the terms and conditions of the new flat fee brokerage account (Box  314 ). 
   The firm&#39;s account system will further process any transactions that do not incur any fees (Box  330 ). The non-fee transactions may include any withdrawals from the cash accounts (Box  332 ) or any eligible trades as permitted under the terms of the new flat fee brokerage account (Box  334 ). 
   Certain pricing options for transactions through the new flat fee brokerage account (Box  320 ) are also processed by the firm&#39;s account system. For certain types and sizes of transactions handled as a unit or block, an additional fee may be charged. Block charges may be waived at an account level (Box  322 ). Once the new brokerage account is established and approved, the negotiated flat fee must be recorded and processed in the firm&#39;s systems (Box  324 ). 
   A fee is charged back to the financial advisor (Box  326 ) when an account does not meet a certain level of profitability. This charge back is discussed more completely hereinafter. 
   If one of the new flat fee brokerage accounts is to be terminated, the firm&#39;s account system must process the termination according to the firm&#39;s termination policy (Box  340 ). The non-cash assets can be liquidated and the cash deposited to a money fund or cash account (Box  342 ). This termination may occur at the expiration of the term or period of the new flat fee brokerage account (Box  344 ). If the termination occurs before the negotiated term, the client will be charged a termination fee (not shown). 
   Subsequent to the processing and billing of the client&#39;s charges (step  4  in  FIG. 1 ), the accounting takes place and appropriate compensation is provided to the responsible financial advisor as shown at step  5  in  FIG. 1  and illustrated in further detail in  FIG. 6 . The accounting and compensation step begins with the determination of the financial advisor&#39;s compensation (Box  400 ). The components of the financial advisor&#39;s compensation include the negotiated annual fee for the new flat fee brokerage account (Box  402 ), from which a retention factor is deducted as part of the firm&#39;s revenue. Any non-waived charges for block transactions are also payable to the financial advisor (Box  404 ), as are fees from excessive mutual funds transfers (Box  406 ). The financial advisor will receive a portion of these fees and charges based on his or her compensation level, computed according to a standard commission grid, and which may thereafter be adjusted based upon performance factors (Box  408 ). 
   The accounting and compensation step continues with the negotiated client fee (Box  410 ) being divided into the portion of the fee payable to the financial advisor (Box  412 ) and the retention factor or amount retained by the firm (Box  414 ). This portion of the fee is the negotiated client fee less a minimum retention factor (Box  416 ). The retention factor is generally a percentage or a number of basis points of the total assets in the new flat fee brokerage account or related to the new flat fee brokerage account (Box  418 ). For example, the retention factor may be 10 bps or 0.10% of all such assets. 
     FIGS. 7   a - 7   c  show in more detail the steps to be taken by the financial advisor in setting up a flat fee brokerage account in accordance with the invention. As depicted in  FIG. 7   a , the appropriate account information stored on a computer database (not shown) is accessed typically over a network link to a particular workstation. At the workstation an account search is initiated at step  20 , and the appropriate account is selected at step  21 . The client information is viewed, and a profile is constructed for the client at step  23 . The investor profile and asset allocation analysis is optionally entered with the new account information. The client information is then tested at step  28  to determine whether the client is new. The account information is then tested at step  33  for any relationship to a flat fee brokerage account established previously in accordance with this invention. If the existing account is already related to another flat fee brokerage account, the relationship may be modified at step  24 , and the related account may be deleted at step  25 , after which the changes are confirmed at step  26 . If the existing account is not already related to a flat fee brokerage account, then the relationship may be established and existing accounts may be incorporated into the relationship at step  27 , or alternatively accounts may be selected from an existing relationship. At step  34 , the financial advisor tests whether the last account has been appropriately related. If not, the process returns to step  21  where a new account is selected and processing continues. If all accounts have been related, these changes are confirmed at step  26  and the negotiated fee is entered at step  31 , after which the new account is submitted for approval. 
   If the client is new, however, a new account is set up at step  29  for the client. The new account is tested at step  32  to verify that the minimum asset level ($50,000) either is being deposited into, or is available for relating to, the new brokerage account. If the eligible holding is greater than the minimum asset level, the financial advisor is queried at step  30  to determine whether there are relationships to be created or edited. If there are other accounts to be related to the new brokerage account, the process continues at step  33  and new relationships are added as described above. On the other hand, if no relationships are to be created or edited, the fee is entered at step  31 , after which the new account is submitted for approval. 
   As shown in  FIG. 7   b , upon entry of the negotiated fee at step  31 , the new account is reviewed, as described previously in connection with  FIG. 3 . First, the new brokerage account application is queried for approval at step  35 . If the new brokerage account is not approved by the brokerage operations manager, then the new brokerage account is unrelated from the other flat fee brokerage accounts at step  39  and the application is returned to the financial advisor at step  40 . 
   However, if the application for the new brokerage account is approved by the brokerage operations manager, the brokerage system is interrogated at step  36  to verify whether the application for the new brokerage account is a newly opened account or an existing account being converted. If the new brokerage account is an existing account being converted, the brokerage accounting data is updated at step  41 , and the account is thereafter established at step  42  for the client&#39;s use and the relationship is established with the other flat fee brokerage accounts. If the new brokerage account is a newly established account (rather than a conversion of an existing account), the client database is updated at step  37  and the new brokerage account is reviewed at step  43  to ensure that the relationship is valid (i.e., that all new accounts in the relationship have been approved). If the relationship is validated, then the brokerage accounting data is updated at step  41 , and the account is thereafter established at step  42  for use by the client. However, if the relationship is deemed invalid (i.e., not all accounts have been approved) and is thus rejected by the client database, then the brokerage operations manager is notified at step  37  and is offered an opportunity to correct the account relationship at step  38 . Upon correction, the process returns to step  35  and the account relationship can be approved by the brokerage operations manager, after which the process is repeated as described above. 
   Referring again to  FIG. 7   a , if at step  32  the eligible assets attributed to the account are found to be less than the predetermined minimum asset level (e.g., $50,000), an error is declared, as shown at step  44  in  FIG. 7   c . The financial advisor is then queried at step  45  whether the application for the new brokerage account is to be aborted or continued. If the application is to be aborted, the profile is saved at step  46 , and the process returns to step  20  in  FIG. 7   a  where a new application is selected for processing. 
   However, if the processing of the application is to continue despite the error, then the negotiated fee is entered at step  47 , and the existing accounts of the client are related to the new brokerage account at step  48  such that the combined assets of the new brokerage account and the newly related accounts exceed the predetermined minimum asset level. The balances of the newly related accounts are confirmed at step  49 , and the application for the new brokerage account together with the new account relationships, is submitted to the brokerage operations manager for approval at step  50 . The brokerage operations manager reviews the application (as described previously in connection with  FIG. 3 ), and if the application is not approved in step  51 , the application is returned to the financial advisor at step  52  for review, revision and potential resubmission. On the other hand, if the account is approved by the brokerage operations manager, the accounting data is updated at step  53 , and the account is thereafter established at step  54  for client use. 
   An important aspect of this invention is that the levels of transactional activity in the new brokerage account, such as the purchase and sale of stock, are monitored to insure that they meet certain levels. If the new brokerage account does not meet the activity levels as agreed upon during the negotiation of the fee, the compensation of the financial advisor is adjusted or the client fee may be renegotiated by the financial advisor. Referring now to  FIG. 8 , the determination of this adjustment or “charge back fee” is illustrated. At the end of each calendar quarter, the firm&#39;s accounting computer processor generates at step  800  a billing report summarizing the activity and the fees for the new brokerage account and its related accounts. The fees being charged are compared at step  805  to a predetermined minimum fee amount, for example 75 bps (0.75%) of the asset value. If the fees being charged are equal to or exceed the predetermined minimum fee level, then no charge back fee is assessed against to the financial advisor at step  810 , and the fees are charged to the client. However, if the predetermined minimum fee level exceeds the fees being charged, then a determination is made at step  815  whether the charge back to the financial advisor has been waived. If it has been waived, then no charge back fee is assessed against the financial advisor at step  845 . However, if the charge back has not been waived, then the amount of the charge back is determined at step  820  as a function of the combined transactional activity levels of the new brokerage account and the fee revenue generated from the relationship. A charge back report for each financial advisor is then generated at step  825 , and at the same time the charge back amount is assessed against the commissions of the financial advisor at step  830 , is ultimately deducted from the net compensation of the financial advisor at step  835 . Thus, the charge back system encourages the financial advisor to review the objectives and goals of a client having a new brokerage account established in accordance with this invention, to insure that these objectives and goals are appropriate for the client. 
   The present invention may be implemented as a system of computer programs running on a networked computer system, as shown in  FIG. 9 . Preferably a client is able to communicate with the networked computer system through the client interface terminal  900 . The client terminal  900  may be a personal computer with a modem, an internet appliance, or other device capable of being connected to and capable of communicating through the financial firm&#39;s network  910 . 
   The network  910  may be a public digital communications network such as the internet, or a private network within the financial firm. If the network  910  is a private network, the client should be able to access the network  910  remotely, despite any so called “fire wall” protection (not shown) which may be implemented on the network. 
   The financial advisor is also able to communicate with the networked computer system, through the financial advisor interface terminal  915 . The financial advisor interface terminal  915  is also connected so as to communicate with the network  910 . As with the client terminal  900 , the financial advisor interface terminal may be a personal computer, an internet appliance, or other device capable of communicating with the network  910 . The financial advisor terminal  915  may also be at a remote location, and thus must also be able to access the network through the “fire wall”. Alternatively, the financial advisor terminal  915  may be directly connected to the network  910 . 
   Although not shown in  FIG. 9 , it should be understood that if is also possible to implement the invention without a client terminal  900 . In this case, the client may be in direct communication with the financial advisor (e.g., in person or via the telephone), and the information and data provided by the client may be entered through the financial advisor interface terminal  915 . 
   The networked computer system also includes a brokerage operations manager interface terminal  935  which is connected do so as to communicate with the network  910 . The brokerage operations management interface terminal  935  may be a personal computer or computer workstation connected directly to the network  910 , or, if the brokerage operations manager is operating from a remote sales office, then the brokerage operations management interface terminal  935  may be connected remotely through a public data communications network and must also be able to access the “fire wall” to the network  910  despite the “fire wall”. 
   The networked computer system further includes an accounting computer processor  955  connected so as to communicate with the network  910 . The accounting computer processor  955  also communicates with a storage medium  957 , such as a magnetic disk, that retains an accounting database. The accounting database contains records of the payable accounts, such as financial advisor compensation, and receivable accounts, such as the negotiated client fees and the financial advisor charge back fees. 
   The networked computer system further includes a client accounts computer processor  945  connected so as to communicate with the network  910 . The client accounts computer processor  945  also communicates with a storage medium  947  that retains the client accounts database. The client accounts database includes for each client, the assets deposited to each account maintained by the client, the value of the assets, and a history of the sales transactions and purchase transactions within each account. 
   The networked computer system also includes a security transaction computer processor  965 , which is connected so as to communicate with both the financial firm&#39;s network  910  and to a public or other private stock exchange network  980 . The security transaction computer processor  965  maintains access for the financial firm through the stock exchange network  980  to any desired stock exchange to facilitate sales, purchases, and trades of assets such as securities (e.g., stocks) and other investments (such as bonds and mutual funds). 
   The security transaction computer processor  965  thus also communicates with storage media  966 ,  967  and  968 , containing records of the sales, purchases, and trades of stocks, bonds and mutual funds, respectively. Further, if the financial firm maintains a market for any of these types of assets (stocks, bonds, mutual funds) the relevant information is recorded in the databases retained on the storage media  966 ,  967  and  968 , respectively, as well. 
   The networked computer system further includes a client evaluator computer  925  connected so as to communicate with the network  910 . The client evaluator computer  925  maintains databases for storing each client&#39;s personal criteria data, such as risk tolerance, each client&#39;s financial criteria data, such as trading activities, and each client&#39;s personal profile data, on storage media  926 ,  927  and  927 , respectively, with each of which the client evaluator computer  925  communicates. 
   The operation of the networked computer system will now be described. A client and a financial advisor make contact to discuss the client&#39;s investment objectives and assets available for investment (not shown), and the financial advisor may suggest the suitability of a new brokerage account in accordance with this invention. As shown at  905  in  FIG. 9 , the client provides information regarding any existing accounts he or she already has with the financial firm. The client also provides or completes a client profile, as described above. 
   The client profile, along with the associated asset information, is then placed in the client profile database  928 . The client evaluator computer  925  thereafter retrieves the client profile with the associated asset information from the client profile database  928 , and the information is transferred to the financial advisor through the financial advisor interface terminal  915 . Based on the personal investment criteria such as the risk tolerance and investment horizon, the client evaluator computer also provides a profile analysis and a recommended flat fee  930  to the financial advisor through the financial advisor interface terminal  915 . 
   As shown at  920  in  FIG. 9 , the financial advisor then reviews the profile analysis with the client and negotiates the fee for the new brokerage account. The financial advisor also initiates the appropriate documentation to create the account, enters the fee and establishes the relationships, as necessary, between the new brokerage account and any existing client brokerage accounts. 
   The information needed for management approval (as described above in connection with  FIG. 3 ) is then transferred from the financial advisor through the financial advisor interface terminal  915  and the network  910 , to the brokerage operations manager interface terminal  935 , for application review and approval as shown at  940 . 
   Upon approval of the new flat fee brokerage account for the client, the account information, including the associated relationships (if any), is transferred to the client accounts computer processor  945  for storage in the client accounts database on storage medium  947 . The account information is also transferred to the accounting computer processor  955  for creation and storage of the flat fee account within the accounting database on storage medium  957 . As shown at  960 , the accounting computer processor generates an initial client fee billing, and any subsequent periodic billings, associated with the new flat fee brokerage account, and transfers them through the network  910  to the client interface terminal  900  and then to the client for payment as indicated at  905  in  FIG. 9 . With the establishment of the new brokerage account, the client also has access through the client interface terminal  900  to request financial advice, such as financial planning and retirement planning, and to request transaction services, such as trading in (i.e., purchase and sales of) securities (e.g., stocks bonds and/or mutual funds), as well as checking account and credit card services, all as described previously in connection with  FIG. 4 . 
   As indicated at  920  in  FIG. 9 , the financial advisor provides the financial advice and can, upon consultation with the client, initiate any requested transactions for the purchase or sale of securities. The security transaction computer processor  965  receives the requests for security transactions (stock, bond or mutual fund purchase or sale), completes the transactions (as shown at  970 ), and transfers information concerning the affected securities to the client accounts computer processor the client accounts database on storage medium  947 . The security transaction computer processor  965  also transfers information concerning the transactions to the accounting computer processor  955 , which in turn updates the accounting database on storage medium  957  for an assessment of client fees (if any) and payment of financial advisor compensation as indicated at  960  in  FIG. 9 . 
   As indicated at  950  in  FIG. 9 , the client accounts computer processor  945  periodically (e.g., monthly, quarterly, or annually) or on demand, creates a status report of the client&#39;s accounts, indicating the assets in the account and the transactional activity levels of the accounts. The report is then transferred to the client and to the financial advisor, preferably through the client interface terminal  900  and the financial advisor interface terminal  915 , respectively. 
   As indicated at  960  in  FIG. 9 , at certain predetermined time intervals the accounting computer processor  955  tabulates the transactions for each client account, and generates a financial advisor compensation report. If a client account does not meet the predetermined levels of transactional activity, the charge back fee as described previously in connection with  FIG. 8  is deducted from the compensation of the financial advisor. 
   It should be apparent that the computer systems as described in  FIG. 9  may be consolidated into a single computer processor, or distributed such that the functional processors reside on many computing systems. Further, the methods and systems of the present invention can be implemented as a program code for execution on a computer system. The program code is stored on media such as the permanent memory of the computer system (not shown) or stored within storage nodes (not shown) of a network accessible by both the client and financial advisor. 
     FIG. 10  shows in more detail the algorithm used in determining a customized fee (Box  500 ) for the flat fee brokerage account in accordance with the invention. First, the system applies a base fee (pre-established by the management of the financial services firm) from which a target client may have an annual asset-based flat fee established. With the assistance of the profile questionnaire, allocation analysis, the client&#39;s trading history, client database profile, and direct conversations with the client, the financial advisor will determine whether there are certain factors in the client&#39;s investment personality that may decrease the client&#39;s fee (Box  502 ) or increase the client&#39;s fee (Box  503 ). Based on these factors, a calculated fee (Box  504 ) will be derived (e.g., between 0.30% and 2.5%). If any of these factors causes the calculated fee to exceed the program maximum fee (e.g., 2.5%) or to fall below the program minimum fee (e.g., 0.30%), the financial advisor must reevaluate whether the client is suitable for a flat fee brokerage account, or the financial advisor must correct any factors that may have caused the fee to exceed these fee limits. This calculated fee is then discussed with the client and a final negotiated fee is established. Periodically, the financial advisor will review the account with the client to determine whether the client&#39;s investment needs have changed, and if so the fee can be increased or decreased (within the defined limits) to reflect changes in any of the factors described in Boxes  502  or  503 . 
   While this invention has been particularly shown and described with reference to the preferred embodiments thereof, it will be understood by those skilled in the art that various changes in form and details may be made without departing from the spirit and scope of the invention.