Take 5: Kunal Kapoor, Morningstar's next CEO, says advisers must demonstrate their value through technology

Five candid reponses on how he will lead the firm, on building staff, the virtues of robo-advice, and rooting for both the Cubs and White Sox

Sep 7, 2016 @ 4:38 pm

By John Waggoner

Morningstar's board of directors selected Kunal Kapoor, 41, to be the company's new CEO, succeeding founder Joe Mansueto, who will become executive chairman. InvestmentNews talked to Mr. Kapoor and asked him about Morningstar's role with advisers and his plans for his first year at the Chicago investment trackers.

InvestmentNews: What are your plans for your first year?

Mr. Kapoor: From a strategic perspective, Morningstar is on solid footing. We have a good business and strategy. I'd like to sharpen how we execute against that strategy — getting things to customers in a timely fashion and reducing release times. I think if you looked at the way we've been investing, we've been trying to grow organically and we've made investments globally that have laid the groundwork for that. One of the areas in the world that we see as having the biggest opportunities is in the U.S. As good as the opportunities are overseas, they are just as good here. It's not a matter of one over the other.

InvestmentNews: The adviser world is becoming increasingly automated and low-cost. What challenges does that present for Morningstar?

Mr. Kapoor: I would say a couple of things. First, tech has always been one of our core strengths, as have design and research. To the extent advisers are finding them more valuable, they do play to Morningstar's strengths. Automation is something that people fear to a great degree at first glance. Everyone thought robo-advisers were going to land with a big thud in the adviser community. But they have gained acceptance in that advisers have found ways to use the new tools they get. From my perspective, technology is enabling the adviser to have a closer relationship with the clients that advisers should be spending the most time with. Tech provides a huge opportunity for companies like Morningstar to demonstrate value.

InvestmentNews: There are now thousands of ETFs and mutual funds. Are you finding it difficult to get enough staff to cover all the new entries?

Mr. Kapoor: The reality is that the vast majority of assets are concentrated in a few funds, and covering that select group is not a challenge. But the question is, what do we do beyond that? Morningstar analysts have prided themselves on finding ideas that are undiscovered and unloved. We've been adding more staff to the research side because of increased demand for manager research service. And that will continue: Research is a key driver of growth for us.

InvestmentNews: Aside from buying more Morningstar products, what's the most important piece of advice you can give to advisers today?

Mr. Kapoor: I think that if you're an adviser, your biggest challenge is how to demonstrate value to clients. A lot of advisers probably can form a stronger bond with clients. The more they try to orient clients to long-term outcomes, rather than short-term ones, the better. I think they need to increase the extent that they think about what they do themselves, and consider their options for outsourcing things that are not core to their practice. Ultimately, nothing wins more than doing the right thing for clients.

InvestmentNews: White Sox or Cubs?

Mr. Kapoor: I favor the Cubs a bit more, but honestly, I support both. I suspect that most people in Chicago secretly do, too.


What do you think?

View comments

Recommended for you

Featured video


Financial therapy fills the gap between money and emotions

Most clients have complicated relationships with their finances, according to Rick Kahler, founder of Kahler Financial Group, and financial advisers can help.

Latest news & opinion

Finra suspends former star LPL rep who borrowed client cash

Regulator says James E. 'Jeb' Bashaw borrowed $200,000 from a client in 2013 without telling LPL.

Higher tax bills following reform surprise clients

Lower withholding and the loss of state and local deductions throw many for loop.

The drawback of Richard Thaler's 401(k)-Social Security idea? Social Security itself

Observers think Congress would need to address Social Security's funding levels and offer enhanced protections for the concept to work

Social Security funding outlook improves slightly

Retirement reserves extended one year; disability fund by 20 years

IBD report: Another impressive year

Despite a stock market decline, revenue is up. And the streak isn't expected to end anytime soon.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print