Working with Client Accounts - Morningstar

Working with Client Accounts

Morningstar DirectSM for Wealth Management

Direct

Copyright ? 2019 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and (4) does not constitute advice of any kind. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Any statements that are nonfactual in nature constitute opinions only, are subject to change without notice, and may not be consistent across Morningstar. Past performance is no guarantee of future results.

Morningstar Direct for Wealth Management May 2019

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Contents

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Creating a Client Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Exercise 1: Create a client account from scratch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Exercise 2: Create a client account by importing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Working with Custom Benchmarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Why should I use a custom benchmark? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Exercise 3: Create a custom benchmark. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Exercise 4: Create another custom benchmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Exercise 5: Apply custom benchmarks to a client account . . . . . . . . . . . . . . . . . . . . . . . 22 What are the options for displaying benchmarks? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Exercise 6: Compare an account and a benchmark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Exercise 7: Display an account and both its benchmarks . . . . . . . . . . . . . . . . . . . . . . . . 28 Exercise 8: Hide a benchmark. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Exercise 9: Display each benchmark in a separate instance of a component. . . . . . . . . 30 Using an Investment Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 What is involved in creating an investment policy?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Exercise 10: Create an investment policy and its Level 1 asset classes and proxies . . . . 36 Exercise 11: Add a level for Morningstar Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Exercise 12: Create the Level 2 sub-asset classes and proxies . . . . . . . . . . . . . . . . . . . . . 39 Exercise 13: Assign weights to the sub-asset classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Exercise 14: Save an investment policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Exercise 15: Apply an investment policy to a client account . . . . . . . . . . . . . . . . . . . . . . . 45 Exercise 16: Compare the allocations of the account and the policy . . . . . . . . . . . . . . . . 47 Exercise 17: Use groupings to replicate a policy's asset classes. . . . . . . . . . . . . . . . . . . . 49 Assessing the Impact of Fees on a Client Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 What fees are charged to a client account? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Exercise 18: Add a platform fee to a client account or proposal . . . . . . . . . . . . . . . . . . . . 53 How can I view a client account's fees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Exercise 19: Display the fees in the Holdings Analysis component. . . . . . . . . . . . . . . . . . 55 Exercise 20: Change the expected one-year growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Editing a Client Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Exercise 21: Remove a holding from a client account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Exercise 22: Add a holding to a client account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Exercise 23: Delete a client account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

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Working with Client Accounts

In Morningstar DirectSM for Wealth Management, client accounts allow you to enter and analyze actual client holdings. Further, you can assign custom benchmarks and an investment policy to the accounts to aid in that analysis. This guide provides instructions on how to create and use these related items, as well as how to connect them to accounts. In this manual, the following topics are covered:

g Creating a Client Account (page 15) g Working with Custom Benchmarks (page 15) g Using an Investment Policy (page 34) g Assessing the Impact of Fees on Client Accounts (page 52), and g Editing a Client Account (page 59).

Overview

A variety of charts and tables can be used to analyze a client account.

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Creating a Client Account

Creating a Client Account

Client accounts allow you to easily track and analyze a client's investments. You can also compare the account to a custom benchmark or investment policy. In this section, you will learn how to do the following:

g Exercise 1: Create a client account from scratch (page 5) g Exercise 2: Create a client account by importing (page 10)

Overview

Overview

You might need to manually create a client in the following circumstances: g You want to mock up an account based on a model portfolio (to represent a client's held-away assets). g You want to create an account for a prospect who is not yet a client, or g You are a potential user on a trial license and your client holdings are not automatically recreated in Morningstar Direct for Wealth Management.

In this exercise, you will create a client account to represent the holdings of a prospect, Karen Franklin. She needs assistance in diversifying in her traditional IRA. Karen is 63 and plans to retire next year. She has given you a printout of the current holdings in the IRA. You will input the investments, set weights for them, and so on. This client account will be used in exercises throughout this guide. To create a client account, do the following:

1. On the header, click the Create icon and select Client Account. The Creating Accounts window opens. Note: If the Create menu doesn't show an option for Client Account, contact your CSM.

Exercise 1: Create a client account from scratch

Note the highlighted selections.

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