Morningstar Wealth has added third-party independently managed accounts to its U.S. wealth platform.
The new third-party SMAs come from asset managers including AllianceBernstein, Congress Asset Management, John Hancock Investment Management, Lazard Asset Management, Putnam Investments and WCM Investment Management. Morningstar will periodically review the asset manager’s lineup.
“Morningstar’s commitment to advisor support is core to our implementation of the manager selection process, leveraging our renowned manager research team,” said Cindy Galiano, managing director of Morningstar’s U.S. Wealth Platform and Investment Solutions. , providing carefully curated investment options on the Wealth platform.” Wealth said in a statement. “Here, advisors have easy access to vetted investment options to best serve their clients without having to navigate a vast market.”
This move is consistent with the growing popularity of SMA. A recent study of 403 financial advisors by data analytics and advisory firm Escalent found that they expect the average SMA allocation to increase from 18% to 26% between now and 2025. A study by Cerulli Associates found that assets in SMAs grew 12% last year compared to the previous year. It is expected to grow another 15% by 2022, reaching $2.2 trillion.
“Advisers have been adapting their strategies for incorporating personal securities into managed accounts, and they have been receiving favorable reviews because of the benefits that managed accounts can provide,” Galliano said in an interview. Recently, more asset managers are offering SMA strategies and gain access to technology that makes advisors’ strategies scalable. “
Morningstar adopted the strategy after talking to advisors and looking for ways to fill gaps in its offering, Galliano said. The Morningstar Wealth team works with analysts from Morningstar Research Services to assist in selecting the first cohort of managers.
“Advisors need to discuss strategy and performance with investors,” she said. “We want to make sure we have a good service model for advisers, not only from an investment perspective but also from a support model to ensure that asset managers are balanced and well-rounded so that they can help us support investors and advisers. ”
