Advisers have work to do to be ready for the next generation of clients, according to Kunal Kapoor, chief executive of Morningstar.
This is because the way in which the investor is changing means they have more access to information and resources than ever before.
Investment offerings are more inexpensive and therefore more accessible.
In general, the investor of today is better informed, and they tend to be younger, starting earlier in investing and having more options than ever before when it comes to how they choose to invest.
Additionally, the ability to personalise portfolios is much greater, which means advisers need to become more sophisticated in their approach.
“How prepared is the adviser for the client of tomorrow? Transitions take time, so it is hard to use a broad stroke and say they are more or less prepared,” Kapoor says.
“They have work to do to be prepared for that next generation; they need to be able to talk a different language; need to be able to use tech differently and they need to be able to explain their value proposition more completely than how they did to this generation’s parents.
“Are [advisers] thinking about it; are they starting to do good work? Absolutely, but they are not there yet.”
In his 25-plus years in the industry, Kapoor has seen many changes, having started off as a data analyst at Morningstar after university.
During his ascent to the top job, Kapoor worked in various parts of the business, including running the research team and helping to build the company’s non-US operations.
His reason for staying in the company he says is its “strong mission and great people”.
“We have grown and growth creates opportunities for everyone in the business. We evolve and change to stay relevant as the investor changes.”
For the full year, the company reported double-digit revenue growth. The last quarter of 2022 saw growth in its licensed/subscription-based product areas offset sharp declines in asset-based and transaction-based product areas, which faced significant market headwinds.
Praemium acquisition
One way Morningstar Wealth is working to stay relevant is with the acquisition of the non-Australian assets of wealth management platform Praemium, acquired in December 2021 – a business that Kapoor describes as an end-to-end turn key platform.
He adds: “If you are an IFA it can take you from the basics of the initial interaction with the client – doing the risk profiling, thinking through how you build the portfolio for the client – all the way to implementation of the actual portfolio and then subsequent tracking and reporting of the portfolio.
“It is intended to be a tech-first, research-heavy and beautifully designed platform that’s easy for advisers to use.”
