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Morningstar Advisor Workstation Gets Structured Notes Analytics

Morningstar and Luma Financial Technologies are partnering to provide structured notes data and analytics.

Information from structured notes platform Luma Financial Technologies will now be available to Morningstar Advisor Workstation subscribers, according to a recent announcement. The two signed an agreement that will provide advisors with structured notes data and analytics, as more than $94.5 billion worth of structured notes were issued in the U.S. in 2021, according to industry data cited by Luma. 

“As structured products continue to grow in popularity, we hope to shed light on a fast-growing, useful and tactical asset class that can play a key role within investor portfolios,” said Kevin Reed, head of strategic partnerships at Morningstar. "This is the first structured products platform collaboration with Morningstar’s Advisor Workstation."

The increased transparency and information around structured notes comes as Morningstar works to “analyze, manage and allocate structured products in an overall client portfolio context,” according to the announcement. In the year ahead, Morningstar wants to organize and classify structured products in a way that allows advisors to more easily evaluate their impact on clients’ portfolios. 

Morningstar wants to "illustrate important trade-offs and empower investors to make better informed financial decisions," he added.

The partnership opens the door to single sign-on capabilities. Advisors using Luma will be able to access the platform directly through Morningstar Advisor Workstation and initiate transactions on Luma, if they are clients of the platform. 

Luma chose Morningstar as a partner because of the latter's reputation for "deep portfolio analysis,” according to Tim Bonacci, Luma CEO and president. It is Luma's sole partner for this type of portfolio analysis. Approximately 180,000 advisors will have access to the firm's data as a result of the partnership, he added.

There is no additional charge to Morningstar Advisor Workstation subscribers for using the new structured product data and no charge for accessing the Luma platform. Product issuers and manufacturers pay a fee to offer their products to firms and advisors through Luma.

Structured notes have been seeing renewed popularity over the past several years and Morningstar isn't the first to provide advisors with structured notes data and analytics. Fidelity Institutional and Envestnet both added access to structured notes platform Simon Markets last fall. Simon completed a $100 million Series B funding round in July.

Fidelity made its integration available via Wealthscape, its web-based execution platform used by RIAs, broker-dealers and family offices. The integration features book of business management and post-trade analysis for advisors.

Advisors using Envestnet's integration will eventually be able to place structured investments in UMAs and proposals, while allowing advisors to “actively manage” their structured investment books of business, according to plans announced by the firm. Envestnet also wants to bring data from structured notes into its financial planning software, MoneyGuide.

Competitor Halo Investing raised $100 million in a Series C last fall as it aimed to sell more products via advisors. It, too, pitched "simplified access" and "transparency" as benefits of its platform's technology. Demand for the products was strong enough that Chicago-based RIA Keebeck Wealth Management, a $1.4 billion firm, signed up for the platform last year.

Advisors using alternative investments platform iCapital are getting access to structured notes platform Axio Financial's systems, as well. iCapital expanded into the structured notes market with its purchase of the platform for an undisclosed sum in September

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