AWS Support Resources

This week we ran the second of our Adviser Forums where we were joined by the FSA who outlined what is expected from advisers post RDR.   We had a great turn out at both events, with 60 advisers joining us in Edinburgh and 62 in London. Colin Wilcox of the FSA outlined the requirements of professional standards, and talked about the scope of service advisers would provide.  When the advisers in the room were asked if they were likely to go Restricted or Independent, the majority at both events stated Independent – this is very different to what the press is telling us.  There was discussion on how independents would provide a fair and comprehensive analysis of the market and having just seen the capabilities of Adviser Workstation, the FSA said that with tools like AWS and others like it, it was very clear that this type of analysis is achievable.  The FSA highlighted that there is not an issue with the implementation of a Central Investment Proposition, as long as the advice given was suitable for the client.  It seems to me that using models works really well as long as you are also in a position to research alternatives if the models are not suitable for the client.

The FSA talked about their expectations for Adviser Practices to have client centric propositions that work for your individual businesses and the importance of having the right controls in place to deliver that proposition.  From the Q/A session that took place after the presentation, it’s crucial for advisers to have systems in place that can back up their proposition and help action and review the advice given.  One of the questions came from an adviser who asked how much depth is required in terms of analysis, and he wanted to know if it was necessary to understand the underlying holdings funds are invested in – the answer was yes.  This is the type of analysis where AWS can provide you with the answer in seconds.  My view is that technology will assist advisers in putting those business controls in place and providing the all important audit trail on  how decisions have been made and ensuring that the recommended investments continue to be suitable for the  client.

Posted in: Events, IFA News and Commentary, Morningstar,

Next year, the 7th annual Morningstar Investment Conference will take place on the 14 and 15 May 2013 at the Park Plaza Riverbank Hotel in London.

At next year’s event you can expect to see an agenda focused around educational insight covering a broad range of investment-based topics.

For a look at the 2012 event, please click here

To register your interest and to receive updates, please complete a short form

Or visit our website

Posted in: Events, IFA News and Commentary, Marketing, Morningstar,

On 11 January we launched the first Morningstar Analyst Ratings for Closed-end Funds. Our coverage now comprises around 70 funds and still growing. At Morningstar we believe wholeheartedly in the investment trust structure and think these funds have much to offer their shareholders.

There was much to do behind the scenes to enable us to give qualitative ratings to investment trusts. We recognise the need for advisers to be able to compare all funds on a like-for-like—and vehicle-agnostic—basis. While this sounds fairly straightforward, the reality is that it’s a little more complex to get the right information.

We have been working hard to get investment trusts to provide their full holdings on a full and frequent basis—something they haven’t had to do before. We’ve then been able to categorise them according to our Morningstar categories, which are holdings-based, to enable that true peer comparison.

With the funds classified under our proprietary categorisation system, we could then enhance the value of our Morningstar Rating by calculating it using an investment trust’s NAV rather than share price. One of the aims of the Morningstar Rating is to enable a comparison of manager skill, rather than performance that’s beyond his or her control. By classifying investment trusts into our Morningstar categories, you can now see the full peer group of like-minded funds and make more meaningful comparisons.

With full holdings data now available on a regular and frequent basis on many funds, we’ve been able to undertake detailed analysis of those funds and start to issue ratings and reports. The funds we’ve covered so far have been some of the largest by fund size, and also the most familiar or prominent names, but crucially it’s also been where we have good transparency and access to the fund managers. That said, we want to make our coverage meaningful and research those funds on which you want our opinion so there are others on our radar where we’re still working on getting that data and access.

So far we’ve covered funds across a range of sectors, and at this stage we’re focused on the more traditional, equity funds – so global equity, UK, European, emerging markets, Asia and also some of the sector funds.

Transparency is still a challenge, although we’re delighted with the response we’ve had to our paper that we released in May: ‘Investment Trusts: Why Transparency Matters.’ In this paper, we wanted to demonstrate why it’s so important for investment trusts to disclose full holdings and on a frequent basis. Investors and their advisers need to have timely information to be able to fully understand risks to which they are exposed. The response has been overwhelmingly positive—not just from those funds on which we weren’t getting data, but we’ve also seen an increase in frequency from others where we were getting the holdings on an annual or semi-annual basis and this has now moved to quarterly or even monthly.

It’s not just the asset managers that have responded positively, it’s the funds’ boards of directors too. Like us, they see the RDR as an opportunity to bring their funds a little more onto the radar than has been the case in the past. To that extent, more and more they’re looking beyond just their AIC sector peers for comparison purposes when reporting to shareholders and we’re encouraged to see their interest in our use of the Morningstar categories.

The biggest challenge is, still, access.  We want to see investment trusts as a feature on the major fund platforms to encourage their wider use. It’s not an impossible task: Alliance Trust Savings has been offering them on their online platform for years.

Posted in: IFA News and Commentary, Morningstar, Research,

The AIC will be hosting a number of training seminars on closed-end funds over the next three months around the UK. The agenda for the seminars will include how to research investment companies – 10 key issues to consider, an analyst/manager’s overview of the investment company sector and the current opportunities, a platform update and a Q&A panel. Speakers will include: Jacqueline Lockie, the AIC’s Training Manager, Annabel Brodie-Smith, the AIC’s Communications Director, investment company analysts/managers, platform representatives. CPD points are available for these sessions from the CII, CISI and IFP and advisers need to individually highlight what gaps the training fulfils.

For more information, visit: http://www.theaic.co.uk/Adviser-Centre/AIC-adviser-training-seminars/

Upcoming events:

Exeter
Thursday 13 September 2012 9.30am – 12.30pm
View event details

Bristol
Friday 14 September 2012 9.30am – 12.30pm
View event details

Leeds
Thursday 27 September 2012 9.30am – 12.30pm
View event details

Manchester
Friday 28 September 2012 9.30am – 12.30pm
View event details

Brighton
Thursday 1 November 2012 9.30am – 12.30pm
View event details

Southampton
** Friday 2 November 2012 **9.30am – 12.30pm
View event details

Glasgow
Thursday 15 November 2012 9.30am – 12.30pm
View event details

Edinburgh
Friday 16 November 2012 9.30am – 12.30pm
View event details

Posted in: Events, IFA News and Commentary, Morningstar,

We’re pleased to announce Morningstar has been nominated for the 2012 Aberdeen Platform Awards as the leading independent planning tool provider.

If you’re happy with the service Morningstar provides, please vote for us: The Aberdeen Platform Awards

Morningstar was nominated in the category of Leading Independent Tool Provider, which is for the independent toolset available to advisers that they most value to support their proposition. It may be an end-to-end solution or a tool for one or more link in with the advice chain.

Posted in: Events, IFA News and Commentary, Morningstar, Research,

In addition to our user forums, we’re going to start hosting monthly drop-in sessions in our London office. Please stop by to ask questions, receive Adviser Workstation training and chat with other advisers who use AWS.

The first one will be Thursday, 16th August from 10am-1pm

Our offices are located at:

1 Oliver’s Yard

55-71 City Road

EC1Y 1HQ London

By Tube: Take the Northern Line to Old Street, then take exit 4 south on City Road. We’re on the left side after Pret A Manger.

No need to register, just drop-in when you can

Posted in: Morningstar,

Did you spot the latest Morningstar®U.K. Market Performance Chart in last week’s Investment Week or Professional Adviser magazine?

If you haven’t seen it before, the annual chart is a historical snapshot of how various asset classes have behaved since 1970 including how economic indicators and political events have influenced investment performance historically.  For example, the U.K. stock market experienced severe declines in 1973–1974 (oil crisis) and 2008–2009 (subprime crisis) that took a significant time to recover.

It also shows the growth of £100 invested in five major asset classes (U.K. equities, U.S. equities, European equities, U.K. bonds, and cash), across three hypothetical portfolios (adventurous, moderate, and cautious), plus inflation since 1970.

Click here to see a chart sample. You can find more general information here.

Posted in: IFA News and Commentary, Morningstar, Press Releases, Research,

Starting last month the Ongoing Charges figure has replaced the Total Expense Ratio (TER) which had been used to measure the impact of costs relating to the management and operations of a closed-end fund. The calculation for Ongoing Charges takes into consideration recent regulatory and market developments in relation to the calculation of expense ratios.

To calculate the Ongoing Charges, Morningstar stores accounting information from each closed-end fund’s Annual Report & Accounts, including all line items from the detailed Fees and Expenses breakdown. Expense data is aggregated to calculate the Ongoing Charges for the year. The Morningstar Ongoing Charge is updated within 1 week of the Annual Report & Accounts publication date.

To read more about the changes, click here

Posted in: Morningstar,

On Wednesday 13 June it’s the next in our series of webinars from the Best Advice: Closed-end Fund Forum group.  This month our topic is centred around some of the quirks of investment trusts and how to manage these.  Advisers have traditionally been put off investment trusts by their perceived complexity. In reality, closed-ended funds are no more complex than open-ended, but it is worth examining the ‘tricks of the trade’ and how expert investors in investment trusts manage the quirks of investment trusts, notably discounts, liquidity and governance.

We will also be talking through how some of our panel members use investment trusts and where open-ended funds might be more appropriate.

I’m delighted to be joined on the panel by Julian Cane, manager of F&C Capital & Income (FCI) and Peter Walls, of small-cap specialists Unicorn, who are representing the investing side; James Moseley, head of sales at Winterfloods and representing the broker’s perspective; and William Hemmings, Aberdeen’s Head of Closed-end Funds. One of William’s responsibilities is liaison with the boards of Aberdeen’s funds so he brings yet another perspective to the table.

We’d love to hear the questions you want answered. You can submit questions in advance through the ‘feedback’ form at the bottom of this page or by emailing me directly.

Please join us in our discussion by attending here: http://www.brighttalk.com/r/dQB

If you are unable to join the live webinar, you can watch again on demand afterwards. During the live event you will be able to submit questions to the panel and take part in audience votes.

Posted in: Events, IFA News and Commentary, Morningstar, Research,

As of the 1st of June you’ll find new Ibbotson capital market assumption inputs and updated asset models in Adviser Workstation.

This year, in addition to the consolidated and standard asset models,  we’ve added supplementary standard models that exclude the Commodities asset class. This is primarily for those advisers using the Morningstar Portfolio Selection (MPS) service.  Commodities has always been a minimal allocation in the Portfolios and for the MPS service, it has been populated by funds which are invested in the securities of commodity-related companies rather than physical commodities.  These indirect commodity investments are not considered a good proxy for physical commodities as they exhibit considerably higher levels of volatility and the underlying companies themselves often hedge their commodity exposure.

Ibbotson ran some further analysis using commodity equities to represent the commodities allocation and found that this did not offer sufficient diversification qualities to justify a separate allocation.

For more information on Ibbotson’s Asset Allocation methodology, click here

Posted in: Morningstar, Research,