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Morningstar Investment Management Review

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Morningstar Investment Management LLC

Morningstar Investment Management LLC

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. 

Disclosures

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.

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research