Morningstar rejects claim

Morningstarhas rejected comments from InvestorWeb chief executive Otto Buttula that the purchase of research data from them by InvestorWeb makes up more than a third of Morningstar’s revenue or that plans by InvestorWeb to source their own data is in any way a danger to Morningstar.

Morningstar corporate affairs manager Christine Winter says the revenue figure mentioned by Buttula in the March 14 issue ofMoney Managementwas incorrect, and was actually within the range of single digits, but could not be disclosed due to commercial interests.

However, Winter admits the figure for business through InvestorWeb’s Visiplan software is higher, but stresses the relationships is with the individual users and not solely with InvestorWeb.

“The default research option in Visiplan is InvestorWeb but users can opt out and use Morningstar. As such, our contracts are with Visiplan users, not InvestorWeb in those cases. That has happened in many instances and provides a good revenue source for the group,” Winter says.

Despite the conflicting claims, Winter agrees with Buttula’s statement that the relationship between the two groups remains strong, emphasising that over the last 12-months, both groups had been working on ways to improve it.

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“We have an open relationship with InvestorWeb and are in advanced negotiations to supply another one year supply of data,” Winter says.

“However, the possibility of not supplying base data would not cripple Morningstar, as we would never allow ourselves to become that vulnerable.”

Winter also reiterated the group’s commitment to the local market saying the US parent Morningstar Inc had committed over $1 million to the local operations, highlighting its intentions to continue operating in Australia.

According to Winter, Morningstar has mapped out a three year plan, which includes a spate of new products and services, such as the new Adviser Workstation, a platform for investment selection, portfolio management, client assessment and communications. The plan also includes bringing in products from the overseas operations of the global group.

Winter’s comments came only days after Morningstar joint managing director in Australia, Bevin Desmond, confirmed the group was not pulling out of the local market despite widespread industry speculation.

Morningstar has also recently enhanced its qualitative ratings model to extend the range and number of funds rated, and shift from a vertical top down analysis of single companies and funds, to a horizontal approach across all companies and funds.