Morningstar launched Thursday a Best Interest Scorecard, a comprehensive tool to help advisors explain to current and prospective clients portfolio and service offerings they propose via a rollover or other process.
The tool, available as an add-on feature in Morningstar Advisor Workstation, enables advisors to assess the client’s current investment plan, changes the client could make within their current plan, as well as the new portfolio and service offering that the advisor is recommending.
The Best Interest Scorecard “provides analysis of the proposed plan, once it’s assembled by the advisor, along three dimensions: Investment Value, Client Fit and Service Value,” Nicolas Owens, head of technical marketing at Morningstar, told ThinkAdvisor on Thursday. “I would describe it as a handy readout on the overall costs and benefits of the proposal, including the underlying investments, portfolio construction and the financial planning services provided.”
Owens said the scorecard was “inspired by” the Department of Labor’s fiduciary rule, “but we took the approach of designing it to be flexible for lots of different proposal scenarios.”
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The No. 1 use of the scorecard for advisors will likely be for 401(k) to IRA rollovers, as rollovers are “where a lot of advisors find new customers,” Owens said.