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Morningstar Reaches Milestone, Becomes First Provider to Manage More Than 1 Million Employee Retirement Accounts

Charles Schwab newest plan sponsor to offer Morningstar Managed Accounts to employees. 

The Morningstar Investment Management group, a unit of Morningstar, Inc. (NASDAQ: MORN) now manages more than 1 million defined contribution plan participant accounts through its investment advisory subsidiaries, making it the first managed accounts provider to pass the million account mark. Financial services provider Charles Schwab is one of the newest plan sponsors to offer Morningstar’s managed accounts service to its employees.

“As retirement plan sponsors take a fresh look at their benefits programs and prioritize how they can help their employees better prepare for retirement and generate income for life, a growing number are choosing to offer managed retirement accounts. It's the only scalable solution that provides participants with a comprehensive plan, personalized recommendations, and ongoing professional management throughout their lifetimes,” Brock Johnson, president of retirement solutions for Morningstar, said. "Now, more and more individuals and the companies they work for put their faith in Morningstar to help them develop and stick to customized retirement and savings plans so they can reach their financial goals. We’re pleased to be the first provider to reach this important milestone.” 

The Morningstar Investment Management group provides advice and managed accounts services to retirement plan participants at every stage of life, whether they are saving for retirement, close to retiring, or already in retirement. During the accumulation stage, participants receive a personalized retirement strategy that includes: 

• Retirement goal and retirement income projections 
• Savings rate recommendations 
• Retirement age recommendations 
• Investment recommendations based on the funds in the plan lineup 
• Ongoing retirement readiness forecasts

For participants already in retirement, the managed accounts service will analyze the individual’s taxable and tax-deferred retirement accounts, Social Security benefits, bequest amounts, tax exposure, pensions, and any other income sources that will be used to fund retirement, such as spousal income. Participants then receive a sustainable spending plan and investment strategy designed to provide income for life. The spending plan includes a detailed overview of income sources with recommendations about how much to withdraw each year from their various accounts in the most efficient manner. 

In addition to providing defined contribution managed accounts and advice, Morningstar offers a comprehensive suite of retirement services to 26 retirement plan providers and more than 280,000 plan sponsors, including online financial wellness through HelloWallet, which Morningstar acquired in June 2014, 3(21) and 3(38) fiduciary services, and custom target-date fund design through its registered investment advisors.

“In 2015 we plan to launch our next generation managed accounts program, which will bring together daily financial money management with long-term retirement planning. We believe this will have broad appeal and draw even more loyal users to our solution,” Johnson added.

The Morningstar Investment Management group, through 11 investment advisory subsidiaries, creates custom investment solutions that combine award-winning research and global resources with proprietary Morningstar data. With approximately $169 billion in assets under advisement and management as of June 30, 2014, the Morningstar Investment Management group provides comprehensive retirement, investment advisory, and portfolio management services for financial institutions, plans sponsors, and financial advisors around the world. In the United States, these services are offered through Morningstar Associates, LLC and Ibbotson Associates, Inc., registered investment advisors and wholly owned subsidiaries of Morningstar, Inc.