Financial advisors need to stop selling themselves short.
The advisory industry too often discounts the value it provides to investors, said Morningstar CEO Kunal Kapoor on Wednesday in his opening keynote address to attendees at the 2017 Morningstar Investment Conference in Chicago.
“There is a gap in terms of the perception of the value of your work,” said Kapoor. “We want to make sure that we bring that value to light.”
According to Kapoor, sound financial planning can help investors generate 29 percent more income in retirement.
During his address, Kapoor told a room of approximately 2,000 advisors, asset managers and investors that Morningstar is offering tools to not only help advisors make better investment decisions, but also to strengthen client relationships and better tell their story.
“We believe advisors add a tremendous amount of value,” said Kapoor. “We think we need to help you and be partners in how you communicate that value.”
Among these offerings are improvements to Morningstar’s data and analytics to examine fixed-income allocations in client portfolios. Kapoor admitted that Morningstar’s existing fixed-income data is incomplete and not always offered to advisors in a meaningful manner.
In 2018, Morningstar will launch a Model Marketplace of model portfolios allowing advisors to shop for strategies. According to Kapoor, New York-based BlackRock is already on board to offer its own models through the marketplace.
The Model Marketplace will compete against existing offerings from firms like Envestnet and TD Ameritrade.
Morningstar is also rolling out a “Best Interest Scorecard” to help advisors make recommendations for IRA rollovers in compliance with the Department of Labor’s fiduciary regulations.