Morningstar Investment Management has teamed up with Envestnet in a bid to make institutionally priced investment options accessible to a wider audience.
In collaboration with IRALOGIX, the two firms are aiming to launch a managed accounts service for Individual Retirement Accounts (IRAs) to provide personalised investment advice, regardless of the account balance.
This new offering will be custodied by Matrix, a subsidiary of Broadridge, and is aimed at making institutionally priced investment options accessible to a wider audience across the IRA space, effectively decentralising them.
The managed accounts service for IRAs is expected to launch in the first quarter of 2024 and will be hosted within an IRA serviced by IRALOGIX. This approach leverages institutional share classes rather than retail share classes, ensuring low-cost investments.
The service utilises the same platform that powers Morningstar Retirement’s traditional managed accounts service, benefiting over 2 million participants in employer-sponsored retirement plans. Envestnet is instrumental in developing the fund-level models for the portfolio-building process within the IRA service.
Morningstar Investment Management’s platform blends portfolios to create unique, personalised investment solutions, adjusting the strategy as the account holder’s needs evolve.
Brock Johnson, president of Morningstar Retirement, said, “We believe the IRA space is ripe for innovation and personalisation. Nearly 40 percent of U.S. households own an IRA, yet the vast majority do not have an advisor and will never be able to retain an advisor because their balances are too small.
“With the help of Envestnet Workplace Solutions and IRALOGIX, we aim to advance access to personalized investment advice and institutionally priced investment options in the IRA space. Every account holder should have access to not only a professionally built investment portfolio, but also one highly configured to their specific needs and objectives,” he continued.
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