Latest version of Morningstar Direct tailored to wealth management pros

Direct for Wealth Management designed to help home offices develop and refine new investment products

May 8, 2018 @ 2:49 pm

By Ryan W. Neal

Morningstar has a new version of Direct, the company's investment research and analytics software, that is tailored specifically to wealth management professionals.

The product, officially known as Morningstar Direct for Wealth Management, is designed to be a single, cloud-based technology with everything a firm's home office needs to develop and refine new product offerings. By bringing manager research, due diligence and portfolio strategy teams onto a single platform, Morningstar director of wealth management software Adrian Johnson said Direct for Wealth Management will help firms who still rely on a disparate technology products.

"For example, you might have manager research analysts using Morningstar Direct, and then a risk team using a completely different tool. Those teams have to share information together," Mr. Johnson said. "It requires a lot of manual work and causes a lot of errors."

The software has team notifications to send firm-wide updates on relevant investments, and uses Morningstar's environmental, social and governance (ESG) data, risk model analytics and scenario analysis. The analytics can be used across an entire business, or down to individual client accounts.

(More: Morningstar embraces artificial intelligence for fund ratings)

This can help advisers quickly and accurately answer topical questions they are getting from clients, Mr. Johnson said. For example, Direct for Wealth Management can show how much exposure a portfolio has to guns and give granular details about the underlying investments.

"Our main goal is to help our home office clients answer those questions from the field advisers, who are getting those questions from the end investor," Mr. Johnson said, adding that a team could use the same data to build new model portfolios that fit clients' preferences.

This well also help firms comply with regulatory changes by making it easier to demonstrate that product decisions are made in clients' best interest, said Morningstar chief product officer Tricia Rothschild in a statement.

"Manager research teams are facing increasing scrutiny around due diligence and the manager selection process to prove they are aligned to their clients' needs," she said.

This is just the first version of Morningstar Direct that will target a specific user base in the financial industry. The company is also developing another version tailored to asset managers, and Mr. Johnson said there could be other versions that curate relevant analytics and workflows for specific users.

(More: Morningstar, Orion and many more vendors unleash tech launches at Schwab IMPACT)

"What we found is when you try to address all of these different use cases in one platform, it creates a lot of noise. It's hard to find information relevant to that user," he added. "We're not going to build an endless number of configurations, but we want to be focused on our core segments."

Wealth management firms can upgrade to Direct for Wealth Management at any time, and Mr. Johnson said the price is "very much in line" with the existing Direct product.

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