Chicago (Oct. 31, 2003) -- Acknowledging the rising popularity of separately managed accounts, Morningstar announced Thursday that it has developed a new rating system for the popular investment tool.
To help investors and their advisors in this area, Morningstar introduced the Morningstar Rating for separate accounts, which is based on the company's proprietary risk-adjusted return methodology. The company also introduced the Morningstar Flexibility Measure(SM) for separate accounts ("Flex Measure"), a tool that helps investors measure the level of customization that each separate account offers.
According to the company, separate accounts now represent more than $400 billion in retail investor assets, and is expected to climb.
"Financial advisors and other professional investors have been telling us there's a need for more transparency and reliable, consistent data in the separate account industry," said Don Phillips, Morningstar managing director. "The Morningstar Rating for separate accounts looks at historical data for two fundamental traits -- risk and return -- and compares them against other separate accounts in the same Morningstar Category to help advisors conduct detailed peer analysis with one familiar tool rather than with numerous rankings and metrics."
Both tools will be available in Morningstar(R) Principia(R) Separate Accounts, an investment research and management software program for financial advisors, in November, and in Morningstar Advisor Workstation(SM), an online investment planning system, by the end of the year.
For more details about the new Morningstar Rating for separate accounts, please see the accompanying fact sheet at http://advisor.morningstar.com/uploaded/pdf/SA_RatingFact.pdf . A fact sheet with more information on the Morningstar Flex Measure is available at http://advisor.morningstar.com/uploaded/pdf/SA_FlexFact.pdf .
-- WebCPA staff
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