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TRANSCRIPT
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©2019 Morningstar. All Rights Reserved.
Morningstar Direct for Wealth Management - Trends & Roadmap
Elizabeth Brigham Head of Product MarketingNovember 14, 2019
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7 Trends We’re Seeing in US Wealth Management
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1. Data is the New Oil
2. Shift to Strategies and Models
3. Goals-Based Planning
4. Better Understanding and Communicating Risk
5. Sustainable Investing
6. Data Privacy in the Digital Age
7. Increased Regulatory Impact
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Which of these trends has caused the biggest shift in the way you work?
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1. Data is the New Oil
2. Shift to Strategies and Models
3. Goals-Based Planning
4. Better Understanding and Communicating Risk
5. Sustainable Investing
6. Data Privacy in the Digital Age
7. Increased Regulatory Impact
Poll Result
https://api.cvent.com/polling/v1/api/polls/sp-gbog7a
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Trend 1Data is the New Oil
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55
Data is the New Oil
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6
personal
6
efficient innovative
Investor Data
Portfolio Data
Investment Data
The Data Triumvirate – What’s Important is How they Come Together
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Investment Data Basics that Everyone Expects and Needs
Mutual Funds
Exchange-Traded Funds
Closed-EndFunds
Private and Public
Companies
HedgeFunds
SAs/CITs/Pooled Funds
Variable Annuity
Retirement Plan Data
Unit Investment
Trusts
Real-Time and Market Data
Group RetirementAnnuity
Indexes529 CollegeSavings Plans
Life, Pension,Insurance
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Investment Data 2.0 Brings a Focus on Strategies and Sophisticated Analytics
Vehicle Agnostic ViewVehicle agnostic and institutional manager research data on strategies
Enhanced Portfolio Analytics• Calculated Fixed Income Stats• Environmental, Social,&
Governance Factors• Geo Segment Data• Risk Modeling
Emerging Data• Structured Products • Health Savings Accounts• Crypto Currencies• Proxy Voting
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Personalization Of Advice
Layering on Investor Data Completes the Data Personalization Equation9
Investor + engagement
Investment Data
Investor Preferences
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Trend 2:Shift to Strategies and Models
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Institutional investors are adopting a more holistic investment
approach across public and private companies
We See the Convergence of Public and Private Market Investing as Interest Shifts to Strategies vs. Investment Vehicles
Traditional markets need access to both
private and public data
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Model Portfolios are Gaining Prominence
Source: Ignites Research, Oct 2019 https://www.ignites.com/research/c/2546963/305973/modernizing_national_accounts_strategy_model_portfolios
https://www.ignites.com/research/c/2546963/305973/modernizing_national_accounts_strategy_model_portfolios
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Morningstar Model Marketplace
Model Portfolios Let Advisors Focus on Scaling their Business, Driving Consistency and Differentiation
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Trend 3Goals-Based Planning
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What Investors Value
Source: Morningstar Research
Help reaching goals
Understands my needs
Skills and knowledge
Focus on best interest
Explains concepts well
Approachable
Good reputation
Behavioral support
Clear fee structure
Can maximize returns
Knows tax consequences
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Investors Say
Help reaching goals
Understands my needs
Skills and knowledge
Focus on best interest
Explains concepts well
Approachable
Good reputation
Behavioral support
Clear fee structure
Can maximize returns
Knows tax consequences
Source: Morningstar Research
What Investors Value
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Help reaching goals
Understands my needs
Skills and knowledge
Focus on best interest
Explains concepts well
Approachable
Good reputation
Behavioral support
Clear fee structure
Can maximize returns
Knows tax consequences
Source: Morningstar Research
Advisors ThinkInvestors Say
What Investors Value
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“The reason people save and invest is to accomplish a goal; therefore, the goal itself should be the center of any portfolio or financial plan.”
David Blanchett, Morningstar Head of Retirement Research
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Goals-Based Investing and Behavioral Coaching Can Help Advisors Add More Value
A goals-based approach to investment planning can help advisors prove their value.
Source: Blanchett, David. 2015. “The Value of Goals-Based Financial Planning.” Journal of Financial Planning 28 (6): 42–50.
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Morningstar Goal Bridge Connects Goals to Investment Plans
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Trend 4Better Understanding and Communicating Risk
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Headlines Are Alarming!
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Confirm or Deny “Headline Risk” Based on Actual Holdings
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Marrying Morningstar Research with Quantitative Analysis Helps Advisors Better Prepare for Challenging Conversations
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©2019 Morningstar. All Rights Reserved.
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