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Margaret Kirch Cohenmargaret.cohen@morningstar.com
Morningstar Announces Next Generation of Retirement Planning Service, Expects to Add Offerings for Retired Investors in 2005

New Morningstar® Retirement ManagerSM Service
Designed to Help Investors Easily Create Diversified Retirement Strategies

CHICAGO, Sept. 21, 2004 – Morningstar, Inc., a leading provider of independent investment research and a leading provider of retirement services to plan providers and employers, today announced it will launch the next generation of its retirement planning, advice, and managed account service, to be named Morningstar® Retirement ManagerSM, in October.

Morningstar Retirement Manager combines new functionality with the strongest features from Morningstar® Advice OnlineSM (formerly known as ClearFuture®) and Personal Advisor, a service that was offered through mPower, an investment advisory firm Morningstar acquired in July 2003.

“When we acquired mPower last year, we immediately went to work to integrate our platforms to combine the best research, technology, and design from both of our service offerings,” said John Rekenthaler, president of Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar that offers the company’s retirement planning services. “We also conducted market research and extensive usability studies with investors. The result is a powerful new retirement planning service that will help investors reach their goals, whether they want to implement Morningstar’s retirement strategies themselves or have Morningstar’s investment professionals do the work for them.”

Morningstar Retirement Manager offers asset-allocation suggestions (guidance), specific mutual fund recommendations (advice), and professionally managed retirement accounts, plus Morningstar’s trademark investment research and education, all in one easy-to-use platform.  If an investor’s employer offers the complete Morningstar Retirement Manager service, the investor can implement his or her retirement plan using Morningstar’s advice and guidance offerings or choose to delegate the portfolio management to Morningstar professionals.  Retirement Manager offers employers the option to deliver services via different media, including online, paper, or through a call center.

In addition, the new Morningstar Retirement Manager service will offer—for the first time—guidance, advice, and managed account services for individuals already in retirement. This new functionality will provide asset-management recommendations, such as what portion of assets a retiree may want to commit to annuities. Rekenthaler added, “This service is designed to address the number-one question of today’s retirees: ‘Will I outlive my money?’” Morningstar expects to debut its “in retirement” services in the first quarter of 2005.

Greater Flexibility, More Intuitive Design

Specific enhancements to the Morningstar Retirement Manager service include:

  • Retirement Strategy Star Rating. Using the familiar concept of the Morningstar Rating, Morningstar assigns a rating from one to five stars to the retirement portfolio to help investors gauge the effectiveness of their overall approach compared with Morningstar’s proposed strategy.  The components of the investor’s strategy, including risks, investments, savings, and the ability to reach his or her goals, are each assigned distinct star ratings, which are combined to create an overall star rating for the entire retirement strategy.
  • Managed Savings. This new option proposes a specific savings strategy and explains the benefits of automatic gradual increases to retirement savings. It gives investors a reasonable, palatable, and significant way to improve their retirement savings strategy.
  • Simplified Decision Making. Morningstar Retirement Manager significantly simplifies the advice process for all types of investors, whether they prefer to delegate management or self-manage their accounts. Whether on paper, via a phone call, or on the Web, every investor is presented with a personalized, consistent retirement strategy with proposed changes applied to each element.
  • Improved Navigation. New, flexible Web navigation meets the needs of all types of investors by offering users the ability to take immediate action to obtain Morningstar's recommendations or, if they want more information before making a decision, they can explore an in-depth retirement strategy, fund information, and investment-related articles.
  • Research and Education. The service now integrates extensive Morningstar research and education within each element of the investor’s personalized retirement investment strategy.

“We have designed our enhancements in a strategic fashion to meet the needs and preferences of investors, their employers, and retirement plan providers,” Rekenthaler said, adding that Morningstar Retirement Manager has been well received in premarket trials.

“We've had an opportunity to preview the new Morningstar Retirement Manager and think it will be a useful tool for participants,” said Gari Aber, vice president of product management for Nationwide Retirement Solutions, a Morningstar client and one of the country’s largest defined contribution plan providers to government employers.  “It’s refreshing to see Morningstar continue to simplify the complicated realm of retirement planning.”

For individual investors who do not receive Morningstar Retirement Manager through their company-sponsored retirement plans, Morningstar will add the online tool to its Premium Membership service on Morningstar.com early next year.

About Morningstar, Inc. and Morningstar Associates

Morningstar, Inc. is a leading provider of independent investment research in the United States and in major international markets.  The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutional clients.  Morningstar tracks more than 100,000 investment offerings, including stocks, mutual funds, and similar vehicles.  The company has operations in 16 countries.  Morningstar Retirement Manager is offered through Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc.  Morningstar retirement services are available to more than 10 million people through approximately 63,000 retirement plan sponsors and 29 plan providers, as of June 30, 2004. 


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