Morningstar, Envestnet team up to revolutionize IRA advisory space

Morningstar, Envestnet team up to revolutionize IRA advisory space
New solution will enable asset managers to empower small-balance IRA holders.
NOV 07, 2023

The large share of U.S. consumers who have an individual retirement account but have balances that make retaining the services of an advisor unrealistic are the focus of a new solution.

Morningstar Investment Management and Envestnet plan to launch a managed accounts service that will provide personalized advice for IRA holders, whatever their balance. It will bring together Morningstar Retirement’s managed accounts methodology with Envestnet’s fund selection and model portfolio-building capabilities.

The firms say that 40% of American households have an IRA but few retain an advisor because of small balances. But the new solution will provide them with the same Morningstar Retirement platform used by 2 million employer-sponsored retirement plan holders.

It will be packaged within an IRA serviced by IRALogix, which provides low-cost investments using institutional share classes rather than retail ones. Morningstar Investment Management’s platform will create blended portfolios uniquely aligned with the account holder’s profile and situation and manage the portfolio for them including adjustment when appropriate. There will be no minimum account balance.

"We believe the IRA space is ripe for innovation and personalization," said Brock Johnson, president of Morningstar Retirement. “With the help of Envestnet Workplace Solutions and IRALogix, we aim to advance access to personalized investment advice and institutionally priced investment options in the IRA space. Every account holder should have access to not only a professionally built investment portfolio, but also one highly configured to their specific needs and objectives."

The new service is expected to launch in the first quarter of 2024 and will be custodied by Matrix, a subsidiary of Broadridge Inc.

"This service is a very powerful collaboration that we believe will give asset managers, broker-dealers, record keepers, and advisors options to shift the growing cost of administering their IRA programs to a private-labeled offering, while still retaining their existing revenue streams," said Sean Murray, head of workplace solutions at Envestnet. "It is a win for investors. It is a win for asset managers. And it is a win for the wealth and retirement industry."

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.