For the last several years, Morningstar has been providing performance-reporting services, along with its established know-how in portfolio management and investment research to independent investment advisory firms.
Instead of pulling the data in manually from a range of outside sources, those firms relied on Morningstar to do it for them.
Now the Chicago-based firm is rolling out the service to a much larger customer base, hoping to serve some of the country’s largest broker dealers and their affiliated financial advisors with its new wares.
The new group, which launched Thursday, is called Morningstar Portfolio Management Services. It will provide registered representatives with back-office and data aggregation services, essentially acting as a liaison between the broker-dealer firms and the custodians, clearing firms, insurance companies and asset management firms.
It will collect portfolio performance data feeds from the custodians and automatically reconcile the information, especially if there happen to be corporate actions or other unique issues with the data being sent, said John Faustino, a senior vice president of Morningstar’s custom solutions business.
Morningstar can import client data from more than 40 unique sources, including custodians, clearing firms and transfer advisors. It can get information directly from companies like PNC, DTCC, DST Fan Mail, Fidelity Investments, Charles Schwab and First Clearing, and is looking to add more providers to that list. Morningstar also accepts feeds from the client firm, so the users can incorporate proprietary data into the Portfolio Management Services and do searches, analysis and reporting from there. Morningstar will also enhance the data with its signature analytics, specifically the Morningstar Style Box and the Morningstar Portfolio Snapshot.
The service can also manage data from an array of security types, from equities and mutual funds to limited partnerships, options, warrants/rights and tangible assets, according to Morningstar.
“The services were born out of requests from clients that loved the portfolio-level reports, but wanted performance reporting integrated into them,” Faustino said.
Morningstar will consult with each firm to develop a custom plan to aggregate, warehouse and distribute client account and performance data to users throughout the organization. They can sort and evaluate client account and performance information. The information is flows into the Portfolio Management Services application, but users can tap into it for other internal applications or analyses. Each client will also receive a custom-designed Internet application that works intuitively.
There are relatively few players in that niche today, said Chris Boruff, president of Morningstar’s software division. But it looks like Morningstar is already getting reception from large operators. PFS Investments, a branch of Primerica, is already offering the service to its 22,000 registered reps, and Morningstar hopes to sign up two other broker-dealer firms soon for the service, Boruff said.