November 7, 2017

What is your average level of annual same-customer growth in the Direct and Data businesses as driven by mix, price, and volume?

We do not disclose same-customer growth but it’s fair to say that it is a key source of growth for us.

Our Direct and Data businesses mostly serve Advisors and Asset Managers. In general, we have solid market penetration in these client groups for these two product lines, though we continue to gain new logos in international geographies and across the various sub-groups of Asset Managers and Advisors. For example, our Best Interest solutions gained Morningstar new clients in the mid-tier banking channel as those firms reacted to the Department of Labor Conflict of Interest rule and Direct has seen increased adoption among the fast-growing fee-only Registered Investment Advisor group.

Because we are constantly investing in our data content, software capabilities, and proprietary analytics, increased spending by existing clients is a key source of growth. Examples of this are new data sets like our Fixed Index Annuity database and our Retirement Plan Intelligence offering. Both datasets are increasing spending by current clients or allowing for price increases as these customers grapple with delivering best interest advice amidst heightened regulatory scrutiny.

We are also aiming to increase our penetration at wealth managers through the launch of our next generation version of Direct. Dubbed Direct for Wealth Management, it builds upon our strengths in investment research by delivering a seamless workflow built around client portfolios, and connects wealth managers to Home-office due diligence teams. Lastly, investments we are making in risk modeling, ESG, and fixed-income are finding strong interest amongst both existing and new clients.

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