Patent ID: 7016870

Claim:
A financial advisory system comprising: a forecasting means for generating return scenarios for each asset class of a plurality of asset classes based upon future scenarios of one or more economic factors; a fund decomposition means, communicatively coupled to the forecasting means, for creating a mapping from each financial product of an available set of financial products onto one or more asset classes of the plurality of asset classes by determining exposures of the available set of financial products to each asset class of the plurality of asset classes; a means, communicatively coupled to both the forecasting means and the fund decomposition means, for determining expected returns and volatility of returns for each of a plurality of portfolios on the efficient frontier based upon the mapping, each of the plurality of portfolios including combinations of financial products from the available set of financial products; and a portfolio optimization means for identifying a recommended portfolio of the plurality of efficient portfolios that maximizes an expected utility of wealth for a particular investor based on the expected returns and the volatility of returns.