Morningstar, iCapital Partner to Bring FAs Alts Investments

Investment research firm Morningstar has partnered with fintech platform iCapital to integrate its alternative investments and analytics services into the Advisor Workstation platform.

The platform is comprised of over 170,000 users who can access alternative investment research tools to analyze private assets along with traditional investments.

“This is a game-changer for advisors who are building a modern advisory practice and serving evolving investors’ demands for diversification and personalization,” said Vimal Vel, chief product officer for Morningstar’s enterprise group.

The two firms just completed the first phase of integration, which grants advisors access to iCapital Marketplace and iCapital Architect. The marketplace platform provides alternative funds, due diligence and educational tools, fund subscription management, and third-party reporting. Architect provides portfolio construction and analysis tools.

The second phase, scheduled for the first half of 2024, will extend the integration to Advisor Workstation’s Enterprise-level clients. This phase will use iCapital’s analytics to generate Morningstar’s Portfolio Risk Score.

According to a Morningstar survey of 600 financial advisors and wealth managers, advisors dedicate 14% to 19% of their assets to alternative investments.

Meanwhile, an iCapital study of 400 RIAs discovered that 36% of advisors employ alternative investments and devote 5% to 15% of their portfolios to them. The report also found that half of advisors say client interest in alternatives has increased in the last two years.

As of November 30, 2023, New York-based iCapital serviced more than $172 billion in global client assets.