An information system for investment advisory process

TLDR: An information system for the investment advisory problem is proposed to aid the wealth managers in providing regulatory compliant investment advice and checks the suitability of the advisory note prepared by the wealth manager subject to a set of inbuilt rules.

Abstract: Information systems in the form of Decision Support Systems (DSS) and Expert Systems (ES) have been used for considerable years in finance, marketing, portfolio management and other fields. Most of these systems use artificial intelligence techniques. Systems have been designed to address the problem of allocating the wealth of an individual across various assets in order to maximize return subject to a certain risk. This problem is known as the investment portfolio management problem. This problem can be comprised of the investment advisory problem and the portfolio allocation problem. This paper proposes an information system for the investment advisory problem to aid the wealth managers in providing regulatory compliant investment advice. The system considers the behavioral traits of the customer and calculates his risk appetite. It then does a risk scoring and allocates the wealth of the customer proportionately in different investment asset classes. It then checks the suitability of the advisory note prepared by the wealth manager subject to a set of inbuilt rules.