Morningstar and iCapital Announce Strategic Relationship to Expand Financial Advisor Access to Alternative Investments and Insights

January 17, 2024

iCapital's investment technology platform is now integrated with Morningstar Advisor Workstation and provides 170,000 financial advisors with access to alternative investments and research.

CHICAGO and NEW YORK, Jan. 17, 2024 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment insights, and iCapital,1 the global fintech platform empowering the asset and wealth management industry with an industry-leading alternative investment experience, today announced a strategic relationship to provide Advisor WorkstationSM users with access to alternative investments and analytics for the first time.

The integration equips Advisor Workstation's more than 170,000 users with alternative investment research and tools to evaluate private assets side by side with traditional investments. Coupled with investment proposal and report capabilities in Advisor Workstation, the solution empowers advisors to offer holistic recommendations and build diversified portfolios that include alternative assets for clients.

"This is a game-changer for advisors who are building a modern advisory practice and serving evolving investors' demands for diversification and personalization," said Vimal Vel, chief product officer for Morningstar's Enterprise group. "Advisor Workstation's integration with iCapital is unique because it'll be end-to-end. Advisors will be able to include alternatives alongside traditional investments in model portfolios, reports, and proposals."

"We are enormously excited to forge this relationship with Morningstar and support expanded access to alternative investing opportunities and insights," said Lawrence Calcano, chairman and chief executive officer at iCapital. "Our simple, intuitive technology interface ensures that Advisor Workstation users have access to both the right products for their clients and an extensive library of educational resources to make informed decisions relating to portfolio allocations and diversification strategies." 

With the recent completion of the first phase of the strategic relationship, independent advisor clients now have access – through a single interface – to both iCapitalMarketplace, a platform featuring the industry's broadest selection of alternative investment funds, due diligence and education resources, fund subscription processing, and third-party reporting services, and iCapital Architect, an innovative portfolio construction and analysis tool for financial advisors to build robust, personalized client portfolios incorporating alternatives.

Phase two, coming in the first half of 2024, will bring the integration to Advisor Workstation's Enterprise-level clients and leverage iCapital's analytics to generate Morningstar's Portfolio Risk Score, a numeric score that represents the risk level of a given portfolio against the Morningstar Target Allocation Index Family, when alternatives are added to client asset allocations. Coupled with the Morningstar Risk Profiler's risk tolerance test, Advisor Workstation can then show the range of Portfolio Risk Scores, known as the Risk Comfort range, within which each client would be most comfortable.

Demand for Alternatives is Forecasted to Increase
Advisors are responding to client needs and an uncertain market environment by offering more products – in the form of alternative assets, according to Morningstar's Voice of the Advisor study that takes the pulse of more than 600 financial advisors and wealth managers across the U.S. The study found that advisors offering a wide variety of products to their clients say alternatives (cryptocurrency, structured products, liquid alternatives, REITs, private debt, and private equity) make up between 14% and 19% of their total assets under management.

In addition, an iCapital survey of 400 U.S. registered advisors last year found that 50% of all advisors said client interest in alternative investments has increased over the past two years. Almost all (95%) advisors surveyed say they plan to allocate the same or more to alternative investments in the coming year. Currently, advisors who use alternatives – about 36% – allocate between 5% and 15% of client portfolios to alts. 

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment insights in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $264 billion in assets under advisement and management as of Sept. 30, 2023. The Company operates through wholly- or majority-owned subsidiaries in 32 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on X at @MorningstarInc.

About iCapital
Founded in 2013, iCapital is the leading global fintech company powering the world's alternative investment marketplace. iCapital has transformed how the wealth management, banking, and asset management industries facilitate access to private markets investments for their high-net-worth clients by providing intuitive, end-to-end technology and service solutions; education tools and resources; and robust diligence, compliance, and portfolio analytics capabilities. iCapital's solutions enable organizations to streamline and scale their operational infrastructure for alternative investments and to provide access to direct investments and feeder funds at lower minimums through simplified digital workflows.

iCapital-managed platforms offer wealth advisors and their high-net-worth clients access to an extensive menu of private investments, including equity, credit, real estate, infrastructure, hedge funds, annuities, and risk-managed solutions. iCapital has been recognized on the Forbes Fintech 50 list each year from 2018 to 2023, the Forbes America's Best Startup Employers in 2021, 2022, and 2023, and MMI/Barron's Industry Awards as Solutions Provider of the Year in 2020, 2021, 2022, and 2023.

As of Nov. 30, 2023, iCapital services over $172 billion in global client assets, of which about $27 billion are from international investors (non-US Domestic) across more than 1,400 funds. Employing more than 1,200 people globally, iCapital is headquartered in NYC and has offices worldwide, including in Zurich, London, Lisbon, Hong Kong, Singapore, and Toronto.

For more information, visit https://icapital.com | Twitter (X): @icapitalnetwork | LinkedIn: https://www.linkedin.com/company/icapital-network-inc

For media inquiries, please contact:

iCapital:
+1 919 602 2806
icapital@neibartgroup.com

Morningstar:
Michael Claussen
+1 312 696-6037
newsroom@morningstar.com

The material herein has been provided to you for informational purposes only by iCapital, Inc. ("iCapital"). This material is the property of iCapital and may not be shared without the written permission of iCapital. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of iCapital.

This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as, legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security. You should consult your personal accounting, tax and legal advisors to understand the implications of any investment specific to your personal financial situation. This material does not intend to address the financial objectives, situation or specific needs of any individual investor. Alternative investments are complex, speculative investment vehicles and are not suitable for all investors. 

The information contained herein is an opinion only, as of the date indicated, and should not be relied upon as the only important information available. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. The information contained herein is subject to change, incomplete, and may include information and/or data obtained from third party sources that iCapital believes, but does not guarantee, to be accurate. iCapital considers this third-party data reliable, but does not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. iCapital makes no representation as to the accuracy or completeness of this material and accepts no liability for losses arising from the use of the material presented. No representation or warranty is made by iCapital as to the reasonableness or completeness of such forward-looking statements or to any other financial information contained herein.

Securities products and services are offered by iCapital Markets, an SEC-registered broker-dealer, member FINRA and SIPC, and an affiliate of iCapital, Inc. and Institutional Capital Network, Inc. These registrations and memberships in no way imply that the SEC, FINRA, or SIPC have endorsed any of the entities, products, or services discussed herein. Annuities and insurance services are provided by iCapital Annuities and Insurance Services LLC, an affiliate of iCapital, Inc. "iCapital" and "iCapital Network" are registered trademarks of Institutional Capital Network, Inc. Additional information is available upon request.

© 2024 Institutional Capital Network, Inc. All Rights Reserved.

1 iCapital, Inc., and its affiliates (together, "iCapital").

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SOURCE Morningstar, Inc.

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