(March 8, 2005) Morningstar just added another toy to the toolkit for fee-only advisors and those thinking about moving in that direction.
The Morningstar Canada F-series fund database, available to advisors who subscribe to Advisor Workstation’s F-series research module, includes more than 800 funds from 29 different sponsors.
The database is not intended to replace existing fund reporting. For example, performance history is limited because fee-based planning and low-load funds are relatively new to the industry, with performance data only available since September 2000. Likewise, key data such as Morningstar Ratings, fund assets, manager data , portfolio turnover, sector weights and largest portfolio positions are based on fund load versions.
Teena Ward, product manager at Morningstar Advisor Workstation, says that rating the funds is not an option at this point given the relatively small size of the F universe. So far, she says there is strong interest in the F-grade database. The company has already made the product available to a large insurance company.
Morningstar’s database group has been working on the project, gathering data sources and contacting mutual fund companies, since July of last year. When building the product, the team designed the database as part of the Advisor Workstation research module to appear alongside existing mutual fund, hedge fund, and separate fund folders.
The module’s features behave similarly to existing Morningstar online products, allowing advisors to build fund tables, create columns with different information, and present material using a variety of views, charts, and reporting.
“This is an extensive list of services available to fee-only advisors,” Ward says. “It allows for a level playing field comparison for funds sold by advisors whose commissions are split.”
Series F funds typically have cheaper MERs—about a full percentage point lower than their front-end and deferred-sale counterparts—because the funds do not set aside any commissions, trailer fees, or other advisor fees. Advisors who sell them charge clients based on their account size or charge an hourly fee for the advice they provide. The purpose of funds is to separate fund costs from advisory costs.
According to Morningstar, the oldest Series F funds, launched in December 1999, are sponsored by Mackenzie Financial.
Filed by Kate McCaffery, Advisor.ca, kate.mccaffery@advisor.rogers.com
(08/03/05)
