Andes Wealth Technologies, the first company to combine behavioral finance and risk analytics, empowering financial advisors to differentiate, satisfy Reg BI, and deliver hyper-personalized services, announces that the U.S. Patent and Trademark Office has approved the patent application of Helen Yang, its founder and CEO, titled Investor Profiling and Behavioral Risk Management System for Wealth Management, covering innovative designs and implementations of behavioral finance and Investment Policy Statement generator.
“These two patents form the foundation of a truly personalized client experience in wealth management.”
Yang invented a modular approach to behavioral finance, breaking the application down into a set of behavioral factors such as investor type, loss aversion, and financial IQ, each of which can be independently assessed. The modular design makes it possible to infuse behavioral finance throughout the client onboarding workflow, an approach that contributed to the company winning the 2022 WealthManagement.com Industry Award in the Client Onboarding category.
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The modular design also allows advisors to build out investor profiles on an ongoing basis to deepen the advisor-client relationship. Using a proprietary algorithm, all behavioral factors are rolled up into a Behavioral Risk Index, a single number from 1-10 that indicates the behavioral risk of investors. During market turmoil, advisors can sort by the Behavioral Risk Index to prioritize clients with higher behavioral risk, who are more likely to panic and make irrational investment decisions.
This patent also covers an innovative cognitive ability test, which helps normalize the conversation about cognitive decline for baby boomer clients and uses visual cues to help financial advisors nudge clients to put necessary protection in place.
The Investment Policy Statement (IPS) generator fills an important gap in the industry. It comprises a modular definition of the IPS and uses an automated process to pull investor data and analytics into a deeply personalized document that help advisors effectively tell the long-term story, leveraging behavioral finance concepts and dynamically generated charts.
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This patent, submitted on July 21, 2021 and approved on November 18, 2022, comes on the heels of Yang’s patent on risk tolerance assessment and deep analytics that was approved in June 2022 (patent id 11403708).
“These two patents cover the key components of personalized client onboarding and ongoing communications workflows, forming the foundation of a truly personalized client experience in wealth management,” said Yang.
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