Broadridge Acquires Morningstar's 15(c) Board Consulting Services Business JL

20 December 2017

Broadridge Financial Solutions, Inc. (NYSE:BR) has agreed to acquire Morningstar, Inc.’s 15(c) board consulting services business. The acquisition will strengthen Broadridge’s ability to be the most complete source for independent, verifiable data that mutual fund boards of directors rely on to fulfill their governance responsibilities.

“This acquisition will enhance and expand our solution set providing fund boards  the most comprehensive data, enabling them to make more informed decisions with the highest standard of reporting,” said Dan Cwenar, Broadridge’s head of buy-side data and analytics. “The expanded breadth and depth of our data-driven solutions will continue to enhance the value we provide to our investment management clients and set the standard for the financial services industry.”

Morningstar’s 15(c) board consulting services business provides materials to the boards of directors and executive teams of mutual funds, helping them meet their 15(c) fiduciary duties to review and approve the fee agreements with each of their investment advisors. This acquisition will enable Broadridge to provide its fund board clients the ability to benchmark funds using both Morningstar and Lipper data via an objective, independent source in order to better assess their fund advisors and sub-advisors. As an objective data provider in the financial industry, Broadridge has a unique ability to provide critical data to fund boards as they face increased regulatory pressure to outsource 15(c) services to independent providers. 

“The decision to sell our 15(c) business to Broadridge aligns with the long-term strategies of both Morningstar and Broadridge,” said Scott Burns, head of data and research products at Morningstar. “Morningstar is sharpening its focus on delivering its fund data and analytics to as many users as possible. With this transaction, Broadridge’s 15(c) consultants and client base can now utilize Morningstar’s industry-standard data and calculations to help fund boards fulfill their fiduciary responsibilities to shareholders.” 

Terms of the transaction, which is expected to close in January 2018 and is subject to the satisfaction of customary closing conditions, were not disclosed.

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