“The Analytic Hierarchy Process is widely used for things like figuring out where to put an assembly plant for a particular product, which is a very complex decision,” DiBartolomeo says. “There are a lot of variables and you want to make the most careful decision possible. There’s been little use of these analytical techniques in finance.”

WealthBalancer uses another innovation, the Discretionary Wealth Hypothesis, to project a household’s changing financial needs.

The Discretionary Wealth Hypothesis expresses a client’s risk tolerance by taking into account what a client can afford to invest over time

The software creates a “life balance sheet” that charts the investor’s current and future financial circumstances. Just as an investor has real assets and liabilities, WealthBalancer projects contingent assets, like an inheritance or a raise, and contingent liabilities, like a college expense or a health-care cost.

WealthBalancer also includes more qualitative inputs, like a client preference for faith-based or tobacco-free investment products.

“These questions aren’t uncommon to the industry,” DiBartolomeo says. “The problem is that what happens behind the scenes is usually very ad hoc. “

Client onboarding with WealthBalancer typically takes less than 10 minutes, says DiBartolomeo, after which advisors can access a projection of a client’s portfolio allocation and asset location.

“To the extent that we have some workable knowledge of what’s next about our asset allocation going forward, I can make as many of those shifts as possible out of cash flow,” DiBartolomeo says. “It becomes about where I withdraw from and where I add to as opposed to rebalancing through trading, and that minimizes transaction costs and taxes, which may become cumulatively large through a household’s life cycle.”

WealthBalancer is divided into two modules—an expert module to be controlled by a firm’s headquarters and a client-facing advisor module.

The expert module includes all of a firm’s market assumptions and outlooks as well as its investment philosophy, while the advisor module includes an input component comprised of client questionnaires and an analytical output component formatted in reports and graphics that includes firm or advisor branding and personalization to the client.