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Morningstar Maintains Focus on Integrating Research and Technology: Schwab Impact

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For Chicago-based research firm Morningstar, “efficient” and “effective” are more than simply corporate-speak thrown around at strategy meetings. Tricia Rothschild, the new head of advisor software, is very specific when defining what it means for both the company and its clients.

“We don’t through those terms around lightly,” Rothschild told AdvisorOne at Schwab Impact 2012 in Chicago on Tuesday. “Effective is the investment information we disseminate, while efficient is the technology we use to deliver it. We have the wherewithal to help.”

In her new position, she’s focused on “integrating our research and analytic into software, so we think of it as more than just technology. We want to highlight some of our thought leadership in the investing space, and one way to do that is through technology.”

So broadly speaking, what does this mean?

“We are incorporating and integrating the best aspects of our information and research, which we formally had in separate and distinct, into our Office product and Advisor Workstation,” she explained. “And it’s all with an eye towards global growth, as we’re a global company with offices all over the world.”

Recent initiatives at Morningstar include independent corporate credit rating offerings, which she said are separate and distinct from the agencies. It’s a forward-looking credit rating methodology underpinned by the equity analysts’ fundamental research, expectations of future cash flows and financial risk measures. Each company’s rating includes four scores, on: business risk, cash-flow cushion, solvency score and distance to default.

“We offer the same scale as the agencies, but are doing it independently. So you can match what the agencies are doing with ours to see if there is a discrepancy and something that should be further looked at. That is the effective part,” she said.

The efficiency, she added, is our continuing integration of our client data at both the enterprise and advisor level.

“We have great research and analytics and great reporting, but we have to bridge that with data from our clients themselves,” Rothschild concluded.


Check out complete coverage of Schwab Impact 2012 and archived 2011 conference stories at AdvisorOne.


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