Morningstar CEO Kunal Kapoor, 45, has joined the board of registered investment advisor Wealth Enhancement Group, according to a Tuesday announcement.
While Morningstar sells services to advisory firms, this is the first time Kapoor is taking a board seat at an RIA firm. He said he sees it as an opportunity for Morningstar to get direct insight into the blossoming RIA marketplace. From industry consolidation to investor awareness of fiduciary advisors, the RIA space has increased in importance to the independent research and financial services firm.
“Morningstar is focused on enabling RIAs to keep pace with those advice demands through our independent insights and investment management services,” Kapoor wrote in an email. “Learning from the inside is one helpful way to keep that focus, and board membership has consistently offered us at Morningstar first-hand insight into areas in the investing world where we expect to see growth and can contribute to investor impact.”
Morningstar’s advisor solutions include software and web-based platforms dedicated to the research and reporting needs of financial advisors. Morningstar Office, a web-based software that focuses on practice and portfolio management, and Morningstar Advisor Workstation, a program that assists with research and reporting, are two solutions marketed to advisors.
Jeff Dekko, chief executive of WEG, said Kapoor’s experience as a leader of a national organization that has become a well-recognized brand among advisors and investors will be of great use as the RIA continues its shift from a regional, midsize business to a national firm.
“Kunal’s tenure at Morningstar has established him as a proven leader of rare ability in the financial services world, with particular skill in driving ongoing growth for large, national organizations,” said Dekko in a statement.
Dan Seivert, CEO of Echelon Partners, said in an email Kunal’s “amazing command of wealth teach” matches WEG’s desire “to be a leading firm in this area.”
“It is a great selection that should benefit the WEG platform and its affiliated advisors and clients,” he said.
Kapoor joins Dekko; A. Charles Thomas, the vice president of data science at Facebook; and two TA Associates managing directors: Todd Crockett and M. Roy Burns. Kapoor also sits on Morningstar’s board, which is chaired by Morningstar’s founder and former CEO, Joe Mansueto.
Wealth Enhancement Group launched its acquisition strategy in 2015 when Norwest Equity Partners sold a controlling stake of the company to private equity firm Lightyear Capital. Within four years, the company grew from $4.7 billion to $12 billion but was soon sold again to private equity investors TA Associates.
In 2020, the firm made a total of five acquisitions, according to M&A consulting firm DeVoe & Company, and now manages $25 billion in assets.
This article has been updated to include comments from Dan Seivert, CEO of Echelon Partners.