When we talk about “right-sizing” the cost structure for Morningstar Wealth, our focus is on growing sustainably with improvements in margins and continuing on a path toward profitability.
Subsequent to the annual shareholders meeting, we announced that AssetMark will be acquiring roughly $12 billion in assets administered on the Morningstar Turnkey Asset Management Platform (TAMP) and that we planned to sunset our TAMP. Once this transaction closes, we expect to see a reduction in revenue from TAMP-related fees, while we maintain certain operating costs (and other one-time expenses) through the transition period, which will wind down as clients and assets transfer to AssetMark. As a result, we anticipate that the transaction will have a negative impact on Morningstar Wealth’s profitability in the short term. Once the 12-month transition period has concluded, we expect to see a positive run-rate impact on adjusted operating income for Morningstar Wealth as planned cost reductions will more than offset lower revenue.
For more detail, please refer to the June 20, 2024, press release announcing the transaction and the accompanying Investor FAQ which are both available at pressroom.morningstar.com.