This brochure focuses on services we offer to retirement plans (individually a “Plan”,
collectively “Plans”) and their participants, known as Morningstar® Managed Plan
SolutionsSM. You can obtain a copy of our brochures describing our other services by
following the instructions above.
Morningstar Investment Services LLC and its Ownership Structure
Morningstar Investment Services LLC is a Delaware limited liability company that was
incorporated in 2000. (Where applicable, the terms “we”, “us”, and “our” also includes
“Our Representatives”, as defined below, in this Firm Brochure.) Morningstar Investment
Services is a wholly owned subsidiary of Morningstar Investment Management LLC.
Morningstar Investment Management is a Delaware limited liability company that was
incorporated in 1999, an investment adviser registered with the SEC, and a wholly owned
subsidiary of Morningstar, Inc. (“Morningstar”). Morningstar is a publicly traded company
(Nasdaq Ticker: MORN) with Mr. Joseph Mansueto, Executive Chairman of Morningstar,
holding more than 35% of Morningstar’s outstanding shares. Because of that ownership,
Mr. Mansueto is an indirect owner of Morningstar Investment Services.
Morningstar Investment Services is registered with the SEC under Section 203(c)
of the Investment Advisers Act of 1940, as amended (“Advisers Act”). Morningstar
Investment Services has filed the appropriate notices to conduct business in all 50
states, the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin
Islands.
Morningstar Wealth, through Morningstar and its subsidiaries, make available
products such as: (i) the Morningstar Wealth Platform; (ii) Morningstar Funds Trust,
(iii) Morningstar Office℠, Morningstar’s RIA portfolio software service; (iv)
Morningstar® ByAllAccounts®, Morningstar’s investment data aggregation
service; and (v) Morningstar.com®, Morningstar’s individual investor site
offering.
Certain Morningstar subsidiaries are authorized in the jurisdictions in which they
operate to provide investment management and advisory services. In the United
States, these subsidiaries are Morningstar Investment Management LLC and
Morningstar Investment Services LLC.
Advisory Services We Offer - Overview
Morningstar Investment Services offers various investment advisory services that
focus on our core capacities in asset allocation, investment selection, and portfolio
construction to retail investors and to institutions including, but not limited to, asset
management firms, advisory platform providers, banks, broker/dealers,
endowments, foundations, insurance companies, investment advisers, investment
fiduciaries, plan sponsors of retirement plans, providers of retirement plan services,
trusts, and other business entities (collectively “Institutional Clients”).
Morningstar® Managed Plan SolutionsSM
The Morningstar® Managed Plan SolutionsSM services (“Services”) are designed to
help employers who are responsible for establishing and maintaining their
company’s defined contribution or other retirement plan (the “Plan Sponsor”) and
the participants enrolled in the Plan (“Participants”). Features within Services are
as follows:
Model Asset Allocation Portfolios
We offer model asset allocation portfolios covering various risk levels (e.g.,
conservative, aggressive, etc.) (each a “Portfolio,” collectively, “Portfolios”). The
Portfolios’ initial construction and ongoing monitoring and maintenance are
provided by investment professional representatives of our direct parent company,
Morningstar Investment Management. In accordance with an agreement between
Morningstar Investment Management and us, those investment professionals
are
acting on our behalf in connection with the Services and Portfolios (“Our
Representatives”). The Asset Allocation series is designed to provide broad
diversification, distinctive, independent research, and progressive risk
management in core portfolios that span the risk spectrum. This strategy invests
primarily in diversified investments in domestic and international equity mutual
funds and/or exchange-traded funds (ETFs) available through the Plan or the Plan’s
recordkeeping provider. The goal of the Portfolios is to provide the Participant with
the ability to invest their Plan account assets in a diversified manner.
Risk Tolerance Questionnaire
We make available to Participants a risk tolerance questionnaire. The
questionnaire’s sole purpose is to provide Participants with general assistance in
terms of identifying their risk tolerance and investment objectives and, based on
this, which model asset allocation portfolio is most aligned with that risk
tolerance/investment objective.
Investment Policy Statement
We provide Plan Sponsors with tools to help them develop an Investment Policy
Statement (“IPS”). The purpose of the IPS is to provide guidelines for the invest-
ment and management of assets held for the benefit of Participants and
beneficiaries of the Plan. The primary intent of the IPS is to:
• Establish a framework for structuring a retirement savings program for Plan
Participants by making available diversified investment options that support a range
of long-term needs, goals and risk tolerances.
• Provide participants with investment options which, when prudently used, will
diversify portfolio risks and better accommodate the range of risk/return preferences
they may have.
• Establish careful procedures for monitoring and evaluating the performance of the
investment options within the Plan.
• Describe the investment process used to select the Plan’s investment options and
the asset allocation portfolios available in the Plan.
• Describe the roles and responsibilities of the various parties that may be involved in
the oversight of Plan investment activities.
Plan’s Investment Lineup
Additionally, we assist Plan Sponsors in determining the mutual funds and/or ETFs
available under a Plan (each a “Fund”, collectively the “Funds”). We do this as a 3(38)
“investment manager” (as defined under the Employee Retirement Income Security Act
of 1974, as amended) through a platform provider. These services include the selection
of securities which are then used to create the Portfolios. We rebalance the security
weightings in the Portfolios and remove and replace securities as we deem necessary.
We determine appropriate Funds primarily through the use of a proprietary fund rating
system that is based on key factors. Such key factors are defined in the Methods of
Analysis, Investment Strategies and Risk of Loss section of this brochure.
Customized Services
We provide advice based on the strategy chosen by you and/or your Financial Adviser
and take into account any reasonable restrictions you request.
Wrap Fee Programs
While the Morningstar Managed Plan Solution service is not a wrap fee program, we do
offer a wrap fee program through the Morningstar Wealth Platform.
Assets Under Management
As of December 31, 2023, the regulatory assets under management for Morningstar
Investment Services (rounded to the nearest $100,000) were:
Discretionary Assets: $11,970,300,000
As of December 31, 2023, the assets under advisement for Morningstar Investment
Services (rounded to the nearest $100,000) were:
Non-Discretionary Assets: $4,460,000,000