Schwab signs Morningstar to provide equity research, ratings

Financial advisers who hold client assets in custody with Charles Schwab Corp. will be gaining access to global equity analyst reports and ratings for about 1,400 companies through a licensing agreement with Morningstar Inc. Schwab represents the largest brokerage firm to date to sign an enterprise-wide license for Morningstar's equity research, which will be made available to advisers and individuals by the end of the year. In addition to the qualitative research on individual companies, Morningstar's 120-person equity research team provides sector reports and pick lists, as well as daily, weekly and quarterly outlook reports. The research being made available at no cost through Schwab currently costs advisers and individuals between $199 for one year and $439 for three years, and there are roughly 122,000 individuals now paying for that service. The annual cost for financial advisers to access the research depends on levels of customization, but can be upwards of $1,000. The licensing agreement will benefit the 7,000 financial advisers currently holding assets in custody with Schwab. “The research reports are only one facet of the service,” said Tricia Rothschild, head of advisor solutions at Morningstar. “In the middle of the 2008 crisis, we were saying, 'Hold on,' and telling people that the fundamentals of these companies has not changed.” Morningstar launched its equity research in 1998. The plan is to add additional services for advisers that keep assets with Schwab, including single sign-on access from Schwab's research workstation to Morningstar's Analyst Research Center, quarterly calls with Morningstar analysts, and access to a Morningstar analyst research liaison desk for more in-depth research into companies.