Morningstar Inc., one of the most widely used data firms in the financial advice industry, is continuing to revamp its strategy with financial advisors, telling them on Thursday it was shutting down Morningstar Office, its portfolio management system.
Morningstar is encouraging financial advisors instead to use Black Diamond, a popular online portfolio management platform.
One financial advisor, who spoke privately to InvestmentNews about the matter, was surprised Morningstar Office was shutting down.
“I’ve been using this service for years and just moved a couple of new clients onto the platform,” the advisor said. “I’m worried about how much a change to Black Diamond could cost.”
It's the second instance in the past several months that Morningstar is jettisoning a service for financial advisors, although the popular fund tracker is hardly walking away from the financial advice industry.
Last June, AssetMark said it was buying roughly $12 billion in assets from the Morningstar Wealth Turnkey Asset Management Platform.
It’s not clear how many financial advisors currently use the Morningstar Office service or what, if any, potential fee increase they may be facing with a switch to Black Diamond, or another service.
"There will always be lower-cost options available in the market, but not all of them can sustain the level of service and investment needed to support advisors over the long-term," wrote a Morningstar spokesperson in an email.
Morningstar has not yet set a date for advisors to move client information to a new portfolio management service.
The two changes, shutting Morningstar Office and selling TAMP assets, indicate that Morningstar is shifting tactics in some areas that financial advisors use. The company is creating partnerships with firms that focus on technology while Morningstar continues to focus on data and research for advisors.
“Advisors are central to our mission of empowering investor success,” said Kunal Kapoor, CEO of Morningstar, in a press release from Thursday “We have a long history of serving them directly with content, technology, and investment products or indirectly through strategic alliances with businesses like Black Diamond that excel in their own areas of expertise.”
Meanwhile, Morningstar’s decision to close Morningstar Office was discussed on the online message board of Reddit.com.
The announcement clearly was a surprise to some who used the portfolio management platform.
“Gotta say this has caught me by surprise,” wrote one Reddit user. “I've been on the Office platform since 2011. I probably should have switched at my last renewal which was 1.5 years ago. They've clearly fallen way behind to competitors like Orion and Advyzon, et al.”
“I stuck with then because it was easy,” the user posted. “So this is probably the kick I need. But I was not expecting to have it tossed in my lap like this.”
With targeted "comfort calls" and strategically automated follow-ups, advisors who leverage their CRM systems effectively can show up when clients need them most.
The plan could offer $24,000 in relief for some taxpayers, but experts warn of consequences.
"I've seen lots of denial in this business but this GPB thing take the cake," says one industry executive.
Commentary from state-owned publication blasts sale to investor consortium as "spineless groveling," denting Hong Kong-based firm's stock.
Higher interest rates and a strong US dollar, which traditionally act as headwinds, haven't deterred market-stung investors from seeking refuge in the yellow metal.
In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'
Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies
