Morningstar: ‘We see an opportunity to re-emerge in the software space’

Over the past few years Morningstar has bought adviser risk profiling business Finametrica, the Wealthcraft - a practice management system and an investment platform - Praemium's UK and international business. 

Speaking to FT Adviser, Morningstar Wealth's head of product Dylan Navra delved into some of the plans that the firm has in place. 

“In short, we're very excited about the opportunity that we have in the UK market,” Navra said. 

“A big focus for us will be to continue to grow our footprint in the investment platform and investment management capabilities, but we really see an opportunity for us to start to re-emerge in the software space to complement that end-to-end journey.”

Navra joined as part of the acquisition of Praemium’s UK and international business in 2022 and is head of product for the new business unit Morningstar Wealth.

This is the branch of Morningstar which targets the independent adviser.

Navra said Morningstar Wealth's role was to bring the company's tools - including those available in the US - together for advisers.

He said: "We see the UK, South Africa and Australia as being key international markets from a Morningstar Inc perspective, but from Morningstar Wealth, we see the UK as a key market for us in terms of platform and software."

In a recent article, Ian McKenna, founder of AdviserSoftware.com said he would be surprised not to see Morningstar’s appearance in the UK market given its recent acquisitions.

 What we don't want to do is corner firms feeling like they have to take additional services that they have, rather than making the option easier to use.Dylan Navra, Morningstar Wealth

Navra explained Morningstar Wealth has brought together all three of these acquisitions to provide support to advisers.

“Finametrica, as an example, has a fantastic client base in a great market penetration,” he said. 

“Adviser Workstation is probably what we're most reputed to be able to offer at Morningstar as a part of research and Wealthcraft offers advisers a practice management option.

“Wealthcraft got a very good client base and experience in the market but what we're trying to do is then create a proposition that allows firms to modularly take on the service that they need, with it feeling like the same unique experience.

“The idea is to change the experience so it feels like the same product,” he said. “But if you need back office services, if you need risk profiling or research, or if you need all together you can start to modularly take them together in a marketplace type experience.”

Staggered approach

In terms of timelines, Navra said the company was looking to enhance this in the next 12 to 18 months. 

“The idea we have now is to continue to support our existing capabilities, which have a very good and loyal client base, work with them to understand exactly what the right next things per product line will be.”

He said it was likely that for now, in the UK, it will probably be staggered. 

“The Adviser Workstation product that we have now, which is our research, is probably the one that we'll focus on now because I think that's the origins in terms of Morningstar as an existing brand so we'd want to be able to really enhance our ability to provide excellent research, and then lean in to add some of the capabilities.”

Navra said Morningstar will partner with firms and see how it can embed them with some of the capabilities of the other.

"We are already talking with clients at the moment now so a lot of the thinking now is identifying what we could do more with the existing services that we have,” he said. 

“We're partnering with a pilot group and the ones we're talking to are around 20 firms that are loyal customers we work with at that point in time to see exactly what might be the roadmap to be able to take forward.”

He explained that integrating Finametrica into Wealthcraft is almost ready. 

“That's going to be the key thing we'll be patient with,” he said.

“What we don't want to do is corner firms feeling like they have to take additional services that they have, rather than making the option easier to use.”

Navra said feedback so far had been positive, with most people questioning how soon it will happen. 

“We're very unique in that we have an opportunity by virtue of having existing products in the market that we don't necessarily have to integrate to providers,” he said. 

“We're both providers, so we have a fast opportunity to go to market so their feedback has been ‘sounds good, let's start to see it in execution’ and hopefully over the next six to eight months as we start to release our first beta releases and prototype, clients will see we're on the right track to delivering the right value.”

sonia.rach@ft.com