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Morningstar Rolls Out Its Own Goals-Based Financial Planning Application

The tool combines behavioral science with a thorough, intuitive workflow.

Morningstar is launching a goals-based planning solution, called Goal Bridge, to accompany its investment planning capabilities, according to a company announcement. The tool has been in the works since last year and is available now as an add-on for Morningstar’s Advisor Workstation; a stand-alone enterprise version is planned for early 2020. Morningstar recognized a need for better investor outcomes and a desire for value-adds among advisors, a twin set of achievements that it hopes will be delivered by its goal-based planning.

Goal Bridge links accounts to goals selected by an investor from a master list of goals, spurring conversations between clients and their financial advisors, said Jason Stipp, director of product management for financial planning capabilities at Morningstar. Inputs include how much money reaching the goal would take, under what time frame the goal is to be accomplished and a basic set of risk tolerance questions.

Goal Bridge currently links goal funding sources using ByAllAccounts, Morningstar’s account aggregation software. However, its enterprise version will take inputs from other aggregators that integrate with an advisor's non-Morningstar portfolio accounting systems and could eventually include integrations with third-party client relationship management applications as well.

The tool matches investor-selected goals with aggregated accounts as funding sources, then allows advisors to create a proposal using their own model portfolios or other investment strategies. All in all, the process takes between 20 and 40 minutes, said Stipp.

The tool is designed for investor “mass appeal,” Stipp added. “It's really an extension of the investment planning that we already do,” he said. “Now you can do investment planning that's centered around goals, which is super important to clients anyway.”

The tool incorporates lessons learned from Morningstar’s behavioral science research, too. Instead of leaving goals to the investor’s imagination, the tool proposes a “master list” of goals that a client can select from, with the option of a customizable goal. By taking this approach, Morningstar aims to avoid a situation where investor goals are “so vague that they might not come up with the things that are really important to them,” explained Stipp. The master list helps investors get a better handle on what they want in the future.

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Morningstar goals master list

The tool is meant to be reviewed at least annually before a meeting with a client, so the advisor can assess progress toward goals. The tool is not meant to replace the “full-blown financial planning” offered by other software providers that have more granular provisions and that are cash flow based, said Stipp. That’s not to say it wouldn’t be competitive with some of the scaled-back versions of those tools, or some of the elementary financial planning offered by automated investing platforms.

Stipp framed the offering as a supplement to what Morningstar currently offers. “We saw an opportunity to extend the investment planning that we're already embedding and offering to advisors, put that into a goal context and connect investment planning with goal planning,” he said. “We think this is really going to help advisors, so that they can have one workflow, create goals with clients and create investment plans and proposals based on those goals.”

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