Morningstar Investment Management provides investment management advice to individuals through their employer-sponsored retirement plans, as well as IRAs and health savings accounts (HSAs). This division of the financial research giant also provides investment management services to institutional clients.
Morningstar Investment Management Background
Morningstar Investment Management is a wholly-owned subsidiary of Morningstar, Inc., a public company traded on the Nasdaq. The firm comprises more than 110 investment professionals working across a global network of locations, including primary 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 retirees
- 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)
There is no minimum account size to become a client.
Services Offered by Morningstar Investment Management
Morningstar Investment Management offers three distinct advisory programs: its Wealth Advisory, Reti
Wealth Advisory Services
Morningstar provides discretionary and non-discretionary investment advisory services to retail and institutional clients through its Morningstar Wealth unit. These include institutional asset management, proprietary model investment strategies (delivered through third-party platforms) and customized portfolios. The firm also offers Select Lists—customized investment menus for institutional clients based on predefined screens—and supports strategy implementation.
Retirement Advisory Services for Individuals
Morningstar offers three service tiers to individual retirement investors:
Managed Accounts: Ongoing portfolio management, rebalancing and monitoring.
Advice: One-time asset allocation and fund recommendations.
Guidance: Educational tools and planning support, as well as asset allocation targets.
Retirement Institutional Advisory Services
Morningstar Retirement delivers fiduciary services to plan sponsors and providers, including lineup construction, model portfolios, target-date glide paths and full portfolio monitoring. Morningstar Plan Advantage, an online fiduciary and recordkeeping tool, is also available.
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 number of fund options to build a portfolio. Two participants under the same plan may have drastically different retirement income needs depending on their age and other factors.
Instead of just relying on past market trends, Morningstar uses forward-looking estimates to guide its decisions. The goal is to help clients stay on track over the long term with strategies that are personalized but built on consistent principles. Whether managing accounts directly or offering model portfolios, Morningstar combines data analysis and expert insight to support a wide range of investors and institutions.
Fees Under Morningstar Investment Management
Morningstar Investment Management’s advisory fees charged to retirement plan participants are usually negotiated with the plan sponsor. Generally, fees for the management of retirement plans range from 0.08% to 0.50% of assets under management. Fees for institutional services typically start at between $100,000 and $200,000 per year.
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.
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).
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All information was accurate as of the writing of this article.
