Morningstar Wealth strengthens its SMA shelf

Advisors on the platform now have more options and flexibility to build customized portfolios for clients.

Morningstar is offering more choice for independent advisors in the US investing space with the addition of new third-party investment options to its wealth management platform.

Following a stringent selection process, Morningstar Wealth has enriched its separately managed account platform by adding SMAs from a number of leading names in the asset management space.

Among the reputable names that made the cut are AllianceBernstein, Manulife-owned John Hancock Investment Management, Lazard Asset Management, Putnam Investments – which Franklin Templeton recently acquired from Great-West Life – and WCM Investment Management.

With SMAs from these asset managers at their fingertips, US advisors on the Morningstar Wealth platform will have more flexibility to build portfolios and unified managed accounts based on their clients’ unique needs and objectives, Morningstar said in a statement.

“Morningstar’s dedication to empowering advisors is core to why we implemented a manager selection process leveraging our renowned manager research team to provide a curated selection of investments available on the Wealth Platform,” explained Cindy Galiano, managing director of U.S. wealth platform & investment solutions at Morningstar Wealth.

There’s no questioning the rise in demand for SMAs, with an estimated 22% of US households investing in them as of 2022 according to a survey by Hearts & Wallets. That rise in ownership, the report said, was led by households with investable assets of at least $3 million.

Based on data from Cerulli, assets in the sector have doubled since 2019 to come within striking distance of $2 trillion. The research firm reports SMA assets grew by 12% last year, and it’s projecting a further 15% increase this year, putting it on pace to reach $3 trillion in the near future.

Headed by Daniel Needham, Morningstar Wealth was brought into being in 2022 as a way to appeal more to financial advisors by bringing together several capabilities – including portfolio management software, investment data aggregation, and managed portfolios – under one unit.

Since then, Morningstar has expanded its wealth platform with a direct indexing solution, which encompasses a suite of core and thematic equity strategies, and the introduction of model portfolios from BlackRock, T. Rowe Price and Clark Capital in April last year.