CHICAGO, May 30, 2003 Morningstar, Inc., a leading provider of investment research, today announced it has entered into a definitive agreement to acquire mPower.com, Inc., a privately held, San Francisco-based investment advisory firm that specializes in serving the large plan sponsor retirement market. Terms of the agreement were not disclosed. Morningstar's advice services are offered through Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary.
"Our acquisition of mPower is a perfect strategic fit for Morningstar and strengthens our position as the leading provider of advice for retirement plan participants," said Joe Mansueto, chairman and CEO of Morningstar. "This acquisition demonstrates our commitment to investors, the large plan sponsor market, and the advice business. For many people, their retirement plans are their only form of savings, so getting good advice on how to build up those savings is crucial. We understand that delivering retirement advice is not a one-size-fits-all proposition. We've clearly established ourselves as having the broadest range of offerings, and mPower gives us a strong foothold in another very important segment of the retirement market."
The two companies expect to complete the transaction this summer. Once the acquisition is completed, Morningstar's online advice and guidance services will be available to 9.1 million retirement plan participants and 53,000 plan sponsors through 34 plan providers. Currently, more than 7.5 million retirement plan participants have access to Morningstar advice through 47,000 plan sponsors and 20 retirement plan providers, including American Express Retirement Services, ING, INVESCO, Scudder Retirement Services, MassMutual Retirement Services, MFS Investment Management, Nationwide Retirement Solutions, NYLIM Retirement Plan Services and T. Rowe Price Retirement Plan Services. Currently, mPower advice and guidance is available to 1.6 million participants, 17 plan providers, and more than 6,000 plan sponsors, including 3M, Wells Fargo, Peoplesoft, Hewitt Associates, and Texas Instruments.
John Rekenthaler, president of Morningstar Associates, will manage the combined businesses. Rekenthaler added, "mPower pioneered the use of online investment advice and has created a highly customized solution for large plan sponsors. Morningstar and mPower share comparable investment philosophies, and we believe both companies' clients will benefit from our combined strengths. We are extremely impressed with the mPower team, their products, and their technology, and look forward to working together to deliver exceptional service to our new clients."
Andrew Huddart, president and chief executive officer of mPower, said, "We are delighted to have found a strong partner in Morningstar--a company with a similar culture and the financial strength to continue to invest in and build this business. mPower's leading capability in the large plan sponsor market is an important part of Morningstar's broader Enterprise Advice strategy, and this acquisition will represent an excellent outcome for our customers and provider partners."
Morningstar Associates began offering online investment advice in 2000 through Morningstar® ClearFuture®, its advice technology. Morningstar delivers consistent advice to investors through a variety of media using the same underlying research, methodology, technology platform, and design. The company currently offers online or print statements for do-it-yourself investors, tools for call center representatives and financial advisors, professionally managed portfolios for participants who wish to fully delegate their investment responsibilities, and a retirement plan design and monitoring service for plan sponsors.
Founded in 1995, mPower.com, Inc, a federally registered investment advisor, was the pioneer in offering online investment advice to defined contribution plan participants. mPower has expanded its service offerings to include wealth management tools for financial institutions and advisors.
About Morningstar, Inc. and Morningstar Associates, LLC
Morningstar, Inc. is a global investment research firm offering an extensive line of print, software, and Internet-based products and services for individuals, financial advisors, institutions and the media. The company is a trusted source of investment information and analysis for stocks, mutual funds, exchange-traded funds, closed-end funds, variable annuities and separate accounts. Investment advisory products and services are provided by Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc.