He notes that his firm has only been gathering information on these services for about a year. Still, does Morningstar have the expertise to cover a kind of business that is very different from mutual funds, the money management product of the masses?

This question is relevant because some of the biggest players in this field are not giving Morningstar the internal numbers and access to managers that investment companies have provided over the years. Resistance to the entrance of Morningstar, famous for its star ratings, into this business is understandable. Indeed, is it possible to effectively rate something that has become popular because it has been sold as a "process," not as packaged financial product such as mutual funds, when the latter has always been sold en masse with little regard for the individual needs of clients?

Separately managed accounts started to gain popularity and considerable assets in the wake of the 1987 crash, according to Reinhart. That's when wirehouses started to sell these services as something better than what the average client had in his/her portfolio. Before the separately managed account, some of these portfolios were often overweighted and had no customization. Usually, there was little or no attention to detail, such as the tax consequences of trading or the individual preferences of clients (such as no investments in defense stocks).

Separately managed accounts, which usually have significantly higher costs than the average fund, have always been sold as a premium money management service. And the business has prospered over the past few years. This comes at a time when mutual fund assets have been draining away in redemptions and the huge losses of most investors who have hung on through the bear market. So will Morningstar's new service inform or confuse?

"It's an interesting question, but I still believe that, given Morningstar's brand recognition and given that it is a third-party vendor without an axe to grind, this will be good for the business," says Christopher Davis, chairman of the Money Management Institute in Washington, which has representatives on its board from many of the big providers of separate account services.

Agreeing with Reinhart, Davis argues that Morningstar's service, along with others, will mean more data will be available on separate account performance. That, he says, will be a good thing.

Others disagree. "My fear is that with these monitoring services, these accounts will be mass produced and will start to be sold as a standardized product, just like mutual funds," argues Walker. Whether they welcome Morningstar or are skeptical, several money management executives told Financial Advisor there is a danger to the business. The popularity of the Morningstar service could draw in shoddy providers, firms that have neither the expertise nor the support services to effectively carry out the soup-to-nuts money management process. "This could become the next limited partnership," one wirehouse money management rep warns.

Since Morningstar started a rudimentary service for monitoring some of these accounts, there is debate over whether this is step forward or whether these accounts will become as popular and, in some cases, as disastrous as many funds.

The separate account process-which includes drawing up an investment management plan, tax planning and manager due diligence, among other responsibilities-is, at times, already being watered down by its popularity, several experts maintain. That could end up hurting the business.

For instance, an effective separate account with sufficient diversification requires at least $250,000 and probably more than that, many professionals believe. Still, some providers in the hunt for assets and business are now selling the process for as little as $100,000.