Morningstar Investment Management provides investment management advice to individuals through their 401(k) or other employer-sponsored retirement plan. This division of the financial research giant also provides investment management services to institutional clients.
Today, the Chicago-based financial advisor firm oversees more than $37.59 billion in assets.
Morningstar Investment Management Background
Morningstar Investment Management is part of Morningstar’s Investment Management group. This entity is composed of more than 90 investment professionals including analysts. The Group’s operation team spans more than 10 main offices in Chicago, London and Sydney.
Morningstar Investment Management Client Types and Minimum Account Sizes
Morningstar Investment Management works with various client types:
- Individual retirement plan participants and individuals who are in retirement
- Plan providers and sponsors who offer investment advice programs to individual participants in defined contribution plans such as 401(k), 457 and 403(b) retirement plans
- Financial institutions
- Third-party advisory programs
- Investment companies (including the Morningstar Funds Trust)
Services Offered by Morningstar Investment Management
Morningstar Investment Management offers two advisory programs. See below for more details:
Retirement Plan Services for Individuals
Morningstar Investment Management offers investment advice to employer-sponsored retirement plans. These may include 401(k) plans, 403(b) plans and more.
Individuals have access to Morningstar’s retirement plan program through plan sponsors that work with the firm.
Morningstar suggests investment strategies to its clients based on a thorough analysis of their financial situation, plan investment options, risk tolerance and retirement income needs. The firm draws from these and other factors to create investment portfolios within clients’ retirement plan accounts. These are built with asset allocations that Morningstar believes can help clients meet their retirement goals.
The firm also offers clients access to Retirement Manager, an online platform designed to help participants make better investment decisions regarding their employer-sponsored retirement plans.
Investment Management for Institutional Clients
Morningstar Investment Management provides institutional clients such as large corporations with portfolio management services. These services encompass everything from devising investment strategies to building and monitoring client portfolios.
The firm can also serve portfolio manager, portfolio construction advisor or sub-advisor to clients that sponsor registered or pooled investment vehicles.
Morningstar Investment Management Investing Philosophy
Morningstar generally seeks growth by creating portfolios that adhere to the risk tolerance and goals of the specific client. Its investing strategy varies, depending on the client type and the client’s overall goals. For instance, a retirement plan participant may have a limited amount of fund options to build a portfolio with. Or two participants under the same plan may have drastically different retirement income needs depending on their age and other factors.
Institutional clients generally have the universe of investments to choose from and Morningstar works with these clients to establish portfolios that aim to meet their established goals.
Fees Under Morningstar Investment Management
Morningstar Investment Management’s advisory fees charged to retirement plan participants are usually negotiated with the plan sponsor. Generally, these asset-based fees range from 0.10% to 0.50% of assets under management.
Asset allocation fees charged to institutional clients typically range from $50,000 to $500,000 annually.
What to Watch Out For
Morningstar Investment Management’s services are limited when it comes to client type. While the firm focuses on portfolio management for large institutional clients and participants of employer-sponsored retirement plans, it doesn’t work with individuals who are not plan participants. It also doesn't offer non-securities related advice to individuals. Certainly, if you’re seeking financial planning services for topics like budgeting, savings and risk management, you will want to look elsewhere.
Morningstar did not have any legal or disciplinary events within the past 10 years to report. For the latest information, you can view its Form ADV on the website of the Securities and Exchange Commission (SEC).
Tips for Finding the Right Financial Advisor
- Need customized portfolio advisory services? Use SmartAsset's advisor matching tool. It recommends up to three advisors in your area and based on your needs and preferences.
- Ask prospective advisors about their credentials. Believe it or not, but you don't actually need special training to call yourself a financial advisor. So people who get certifications, like certified financial planners (CFPs), may have that much more qualification - and the standards of their credentialing organization to uphold.
All information was accurate as of the writing of this article.