As the annual
On Wednesday morning, it was announced that a new portfolio analytics feature was coming to Morningstar Wealth via its data aggregation solution that specializes in the unique demands and challenges of financial advisors, investors and the platforms supporting them.
The upgrade applies analytics to aggregated portfolios through a turnkey integration with
This includes regional breakdowns, asset allocations, equity and fixed-income sector exposure, as well as equity and fixed-income style boxes that help advisors provide more accurate personalized investing advice.
Morningstar says the portfolio analytics feature streamlines advisor workflows by leveraging investment data for proposal generation, portfolio exposure and risk analytics.
"At Morningstar Wealth, we have plans to continue to innovate the ByAllAccounts product to exceed advisors' expectations," Daniel Needham, president of Morningstar Wealth, said in a statement. "With more than 20 years of dedicated investment experience and the industry's highest quality of aggregated data, Morningstar Wealth will continue to inform and drive advisor success."
Katy Gibson, general manager and head of product for ByAllAccounts at Morningstar Wealth, said with the industry growing increasingly competitive, advisors need to take every opportunity to differentiate themselves and make the most efficient use of their time.
She said her team offers wealthtechs and broker-dealers the right combination of data and technology to help them "cost-effectively provide advisors with the tools they need to service their clients and scale their practice."
And speaking of cost effectiveness, Gibson told Financial Planning that great effort went into making sure the individuals they aim to serve can take advantage of the new ByAllAccounts capabilities without cost being a barrier.
The motivation, Gibson explained, is that Morningstar believes in fostering a healthy wealthtech ecosystem. But they've gathered feedback that Morningstar data, while praised for its quality, was cost-prohibitive.
"There are two target audiences for this. No. 1 are smaller wealthtech startups. They, for the most part, can't afford Morningstar data licenses, which are more geared toward larger firms. And this gives them an opportunity to pay as you use, so to speak. Our hope is that as they grow, they will become users of the larger data license," she said. "And then for larger firms … they're doing a lot of this mapping on the back end. So they get data from various sources and then they have to map back to things like regional breakdowns, sector asset allocation and so forth. And a lot of times, they're buying that data from Morningstar. So imagine that we are doing the work for them."
She added that as firms are trying to figure out what their strategy is around data analytics, the ByAllAccounts team feels that analytics has reached a tipping point, meaning there are now a number of quality tools that eliminate the need for firms to hire expensive data scientists to run analytics for them.
"The tooling has become so robust that many firms are investing in the tooling. And they are putting a lot of premium into custom analytics models, as opposed to buying generalized models from the market," Gibson said. "And so our strategy around that is we want to be a data provider. We want to make sure that we bring you high-quality, normalized, structured, highly enriched data, and be adaptable to whatever tooling you are using so that you can create your own custom models on top of that data."
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