Morningstar Inc. has won the business of a new retirement program being offered by
Voya Financial Inc.
The deal expands the relationship between the two firms with a model portfolio program that Voya expects to eventually roll out to 400,000 plan participants, according to Maggie Dietrich, a Voya spokeswoman.
Voya Financial Advisors Inc. disclosed the Wealth Management for Retirement program and Morningstar's involvement in a filing with the Securities and Exchange Commission this month.
The program is currently available through Voya's more than 3,000 brokers to 10,000 people enrolled in 401(a) and 403(b) retirement plans not subject to the Employee Retirement Income Security Act of 1974, a U.S. law governing brokerage accounts for many retirement savers.
Morningstar, a Chicago-based investment manager and research firm, selects investments for model portfolios from selections made by employers from a menu by Voya, according to regulatory filings. The allocations are based on the general investment goals of plan participants, such as “income” or “aggressive growth.”
“Through this program, Voya financial advisers are able to provide holistic advice for in-plan and out-of-plan assets,” said Ms. Dietrich.
The program, which Voya began rolling out in June, could be a boon to Morningstar. About one in five dollars in revenue earned by Morningstar, which also provides research and technology services, come from managing money. But investment management is growing faster than that larger business segment — 12.6% to 6.8%, respectively, in the last quarter — driven by investor deposits and strong equity markets.
The firm is now second only to Financial Engines Inc. as a managed-account provider in the defined-contribution space. It advised on $74.4 billion in retirement assets as of June 30, a 33% increase from the same time in 2013, according to its most recent earnings statement.
Financial Engines managed $98.4 billion on June 30, a 32% increase over the year prior, the firm said.
A Morningstar spokeswoman did not respond to a request for comment.
Morningstar's investment advisory division, which started providing managed accounts in 2001, already builds and manages model portfolios for other programs offered by Voya, the broker-dealer formerly known as ING Financial Partners Inc.
A Voya spokeswoman declined to say how many assets are in its programs with Morningstar or comment on when it expects to expand the program to the full number of potential participants.
