Time is a financial advisor’s most valuable asset. As industry tailwinds push the profession toward greater client-centricity—and as clients demand more from their advisors—many are recognizing the benefits of outsourcing investment management. By doing so, they can focus on what truly drives their business: being in front of clients and strengthening relationships.
Nicholas VanDerSchie: Fidelity's annual RIA benchmarking study reveals a compelling trend. Advisors who outsource key functions of their practice have experienced faster asset growth, higher revenue and stronger client acquisition. Over the past decade priorities in the advisory space have shifted, business development and planning is now top of the list while improving investment performance has fallen down the rankings, showing a clear move towards a business model that aims to free up time to focus more on enhancing the client relationship.
In June, Morningstar and AssetMark announced a strategic alliance combining strengths to better serve advisory practices that are leaning into the outsourcing trend. Working together, both firms are enabling advisors to build better practices by focusing on the high value activities they enjoy, client relationship management, behavioral coaching, and financial planning. In today's episode, I'm delighted to be joined by Anthony Huynh, Senior Vice President and Head of Advisor Sales at AssetMark, and Jonathan Linstra, U.S. Managing Director for Morningstar Wealth. They'll dig into these topics and share perspectives from the advisors they work with on a day-to-day basis.
Hello and welcome to Simple, but Not Easy, a podcast from Morningstar's Wealth Group where we turn complicated financial developments into actionable ideas. I'm Nick VanDerSchie, Head of Strategy and Execution for Morningstar Wealth, and I'm delighted to be joined by our two special guests today.
Before we get into the conversation, if you'd like to know more about how we support advisors, we welcome you to email us at simple@morningstar.com or me directly at nicholasvanderschie@morningstar.com. Now, let's get started. Anthony, Jonathan, welcome to Simple, but Not Easy.
Jonathan Linstra: Yeah, thanks, Nick. Great to be here.
Anthony Huynh: Appreciate you having us.
VanDerSchie: So, Jonathan, first and foremost, I want to start with you. Welcome back to the podcast. As our listeners will remember, you were the former host of this very podcast, passing the baton to me at the end of 2023. What have you been up to since leaving your post here at Simple, but Not Easy?
Linstra: Oh, gosh, Nick. Hey, first of all, great to see the listenership take off post my departure, and it's in great hands now. But, hey, look, we've just been continuing on with the mission. We're out there talking to advisors, helping them build their businesses with Morningstar investments and capabilities. So, having a great time doing that.
VanDerSchie: Fantastic. And Anthony Huynh, Senior Vice President, Head of Advisor Sales at AssetMark. We're really glad to have you on the podcast. Maybe to start, can you share a bit about your background and tell us about your role as Head of Sales at AssetMark?
Huynh: Yeah, thanks, Nick. Again, thank you so much for having me and Jonathan on the podcast. I'm excited to participate today. So, I've been with AssetMark since 1997. So, I think my math is about 27, 28 years here. So, I've been with the firm a long time. My current role at the firm as Head of Advisors is I work with all of our commercially based ensemble teams. So, we have about 90 to 100 folks out in the field that work directly with financial advisors out in the field. And so, I oversee those teams across the country and been doing it for a long time here at AssetMark. So, excited to share a little bit about our organization with all you listeners today.
VanDerSchie: Great. So, in June 2024, AssetMark announced that they would be entering into a strategic alliance with Morningstar, including the acquisition of TAMP assets, a deal that was then ultimately closed in December. You know, Anthony, before we get into the strategic alliance for our regular listeners who may not be as familiar with AssetMark, could you tell us who AssetMark serves and what profile of advisor tends to work with you?
Huynh: Yeah, absolutely. So, here at AssetMark, we predominantly work with independent broker dealer advisors and RIAs. We have about 12,000 or so advisors on our platform currently. And if you look inside that universe of 12,000, you click underneath, there's probably three primary types of profiles of advisors that we work with that come to us and that we've been able to help. The first is what I'll call the commissions to fee advisors. These are advisors who have been predominantly running a commission-centric practice. And they want to make that sort of transition to more of a reoccurring advisory type of practice. And so, we've had a lot of experience over the years working with this type of advisors. This is your, classic sort of A-share, C-share type of mutual fund advisor looking to make that conversion.
And so, we have a lot of tools, a lot of resources and a lot of experience in working with this type of advisors. It's a very common type of profile on our platform. -- I would say is what I call the outsourcer. This is somebody who's been predominantly rep as PM or managing the investments in-house. And they're really looking to sort of outsource that investment component of their practice. And typically the catalyst for this is really time, right? They're looking to get some time back, you know, versus doing all of the research, investments, allocations, and all those investment-centric type of activities. They're hoping to get some time back to reallocate into other parts of their business, whether it be business development, whether it be client servicing, or maybe even some personal work-life balance activities.
And so, sort of that outsourcing transition from rep as PM is also a very common profile that we work with on the platform. And then last but certainly not least is what I'll call the consolidator. This is an advisor that's already made the decision to outsource, but they're currently using multiple platforms, two, three, four different platforms. And typically the reason why they're using so many platforms is they're seeking investment diversification, right? They're using different products across different platforms to meet the needs of the different clients that they have. But unfortunately what ends up happening when you're using multiple platforms and seeking investment diversification is you get back office diversification, which nobody is seeking. And so, one of the ways we help this particular type of profile is we're able to get them, you know, the different types of investment diversification they're looking for, but clearly without the back office diversification, everything's sort of, you know, one 1099, one platform, one paperwork system, et cetera. And so those are, I would say, probably the three common types of profiles that you can almost fit every single advisor who comes to AssetMark and they're looking for some help in that sort of transition. And we've been able to work with those types of advisors over the years.
VanDerSchie: That's helpful, Anthony. Thanks for going through those profiles. So Jonathan, turning to you and maybe just to set the stage, if listeners have not yet heard about the strategic alliance with AssetMark, could you bring them up to speed?
Linstra: Yeah, sure. As you know, we operated a successful wealth platform or turnkey asset management platform for many, many years. And for most of those years, offering our own proprietary investment offerings and then in more recent years, opening up our platform to include other third-party asset managers to meet the increasing client demand really for investment choice and personalization and flexibility. And as any business does, we're constantly evaluating our operating model and making decisions that we believe will best serve advisors, investors, and the business. And so we made the decision to exit the TAMP business and in doing so, established this formidable strategic alliance with AssetMark, really a firm that is well known for its industry-leading service and experience and curated offerings. So I think the audience is well aware of the ethos and mission we have here at Morningstar, which is to empower investor success. We see this strategic alliance opportunity with AssetMark as a clear alignment to that mission as we seek to better serve advisors and investors. And for the 9,000-plus advisors on the AssetMark platform, we'll now be able to offer many of our Morningstar investment strategies and capabilities through their platform. While continuing to serve those advisors, we've cultivated these long-term, valuable relationships within the past.
VanDerSchie: Fantastic. Okay, so the announcement was made last summer. There's been a lot of time to connect with the field and collect feedback. Anthony, let's start with you. What's been the response since this announcement of the strategic alliance?
Huynh: Yeah, the response has been just incredible. Just extremely, extremely positive. I'll share it maybe from a couple of different angles. First, I would say that the advisors who were working on the AssetMark platform that were not accessing Morningstar, they couldn't be more excited. As Jonathan mentioned, now they're going to be able to access all of the incredible investment capabilities and expertise that Morningstar has to offer. And so now they'll be able to make that available to the clients that they work with currently on the AssetMark platform. And so those advisors, there's nothing but positive upside there. And the reception has been really, really positive on that end. Internally, I would say that from our associates' perspective, again, just nothing but positivity. Morningstar is a firm that we're very, very familiar with. We've worked out, we've seen them out in the field for a very long time. We've been competitors, quite frankly, for a very long time, a very respected competitor out in the field. And anytime you have an organization that you respect, that you're competing with, and now it's part of the offering that you're able to give.
I mean, there's absolutely no downside to that. And they're extremely excited about that. And then the third group is, when we were putting together the and we did the analysis, there's actually over 700 advisors that use both platforms. They currently have business with AssetMark and Morningstar. And what that told us is, for those advisors, they were looking for the best of from both organizations. And to have the ability to offer that up of sort of the combination of the best of both worlds, I think it's extremely exciting on that end. And then for the advisors that have been accessing Morningstar exclusively, that we have not been able to work with the experience on that end has been fantastic also. We've been able to start connecting with some of those advisors in the last several months, since the has been announced, and that's gone very well. And so, we're excited to work with those advisors also. So, I honestly can say it's been just positive all the way around. We have not seen much negativity or sort of anything other than positivity on this announcement. So, it's been fantastic.
VanDerSchie: And Anthony, as a quick follow-up to that, what have been the common questions coming from the advisors on your platform?
Huynh: Yeah, I mean, I think the most common question is, what type of investment capabilities are we going to have access to at Morningstar, help us learn more about the Morningstar expertise and the capabilities. And so, we've been getting a lot of those questions. And as I mentioned earlier, the reception has been fantastic. And our integration team did a really good job in setting everything up. And I think starting in September, we've been able to make accessible all the Morningstar strategies on the AssetMark platform. And so those have now been, for the last quarter or so, accessible to the AssetMark advisors and also any advisors, quite frankly, they're looking to access the Morningstar strategies on the AssetMark platform.
VanDerSchie: And Jonathan, as you mentioned a minute ago, this marks a bit of a pivot for the advisors who have been using our platform over the past two decades. What have been some of the major questions you've heard from them and how have we addressed them?
Linstra: Yeah, great question, Nick. And it's really the reality of change, right? I don't think any of us really look for change in our lives, especially this kind of change when it's operational and we're trying to, you know, advisors are trying to serve their clients. And the initial responses, I would just say, are probably what you'd suspect, the questions we were getting early on were, Hey, what does this mean for my clients? What does this mean for my business? Am I being forced to change my practice? Will I still have the ability to offer all the great Morningstar investments, that I have my clients have gotten used to, become so familiar with through the years? And, you know, thankfully, though this is most certainly a change, right, for advisors that we've been working with for many, many years, we've had to Anthony's point, we've had an overwhelmingly positive response from our advisors to the AssetMark offering and the path forward. You know, as we mentioned earlier, AssetMark is known for incredible service and support. Anthony and his team do such a phenomenal job at point of sale in the field, you know, but also behind the scenes, those that have worked with AssetMark in the past, you know, Carrie Hansen, the Chief Operating Officer there, at AssetMark, she and her team are the ones that will really be executing on this transition of assets across many advisors practices from Morningstar to AssetMark. And she and her team, they're just one of the highest caliber team of professionals in the business.
You know, as she likes to say, this is not their first rodeo. And so, you know, we and the team at AssetMark are aiming to have this be the smoothest transition that they as advisors have ever been a part of. Now, you know, some of this frankly depends on them, the advisors that we're speaking to, you know, engaging the Morningstar team, the AssetMark team to make sure that they are operationally ready for this transition. You know, are their accounts in good order? Do they and their support teams have accurate sign-ons and credentials on the platforms, et cetera. So, that's what Anthony's team and my team are currently engaged in doing. We're surrounding these advisors, making sure they know that they've got a great path forward, that they've got resources all around them to help them make this a great experience and simple transition.
VanDerSchie: Fantastic. So, I think we've covered a lot of the where we've been, so to speak. But I want to really move to what the future holds. And one of the things that any collaboration hopes to create is something greater than the sum of its parts. And so, you know, Jonathan, with that in mind, what is Morningstar bringing to the table that AssetMark and their advisors should be most excited about?
Linstra: Yeah, it's really the crux of why did we do this, right? Like, what does it really mean? And again, we're really excited about to be able to now offer Morningstar's investment capabilities and strategies across the AssetMark platform. And in some cases, in many cases, as a matter of fact, introduce ourselves to some advisors who may not be aware that Morningstar even manages money. You know, Morningstar is often known for our expertise and our legacy in research and data insights and technology. And while all true and well earned, you know, some advisors aren't even aware that they can now deploy all that meaningful IP to their clients through the implementation of some of these Morningstar investments. So we're really excited about that. Morningstar is such a powerful brand with advisors and not only advisors, but their clients. And that's been earned for, you know, over 40 years now. So, from a Morningstar perspective, we're really excited to continue to expand our reach into the advisor intermediary space, introduce our investment options to some who may not be aware of them.
VanDerSchie: And along those same lines, Anthony, what will the AssetMark be able to offer Morningstar advisors that they haven't had access to previously?
Huynh: Yeah, great question. You know, we're really excited, you know, on a couple of fronts, you know, Jonathan had referred to it a couple of times, service is really at the heart of what we do in our culture here. We are a service-first organization. And so, you know, we're very, very excited to sort of deliver that sort of servicing experience first and foremost to those advisors. You know, one of the questions we ask ourselves internally all the time is why AssetMark, right? We have to constantly ask ourselves the question, why would an advisor use us? And we do something here at the organization, you know, where we send out the Net Promoter Score Survey. We do that every single year. And I would share with you that that's probably the single most focused on stat or metric here at the organization, because we want to know what our advisors are thinking. And I think if you ask most of the advisors who work with AssetMark why they do, probably within the first five to 10 seconds, if not sooner, the word service will be uttered. And so that servicing experience is one of the primary things we're looking to deliver to the Morningstar advisors.
Second to that is our business consulting or practice management services. And, the history of the firm is that it was founded by three independent broker-dealer advisors back in the early 90s. They were actually (Royal Alliance Advisors). And one of the things that they learned early on is that in order to be successful, it's a formula of two things. You got to be a fantastic advisor, but you also have to be a great business person. And the reality is that all the advisors we work with, they are a small business owner and they run a small business. And being a great advisor and a great business owner are two completely different skill sets. The analogy that I often use is I can be the most incredible chef in the world and make the best food, but it does not guarantee I'm going to run a successful restaurant. And so one of the areas that we try to help advisors quite a bit on is that business owner side.
And so we have a lot of business consulting or practice management services. We have an entire team. We invest heavily in this area. It's part of our lineage. One of the things that I think made AssetMark successful in the early days is that focus on practice management and business consulting. And so we have a tremendous amount of business consulting services that we think we can share with those Morningstar advisors to help them with that business owner side of it. Things from service models to setting up compensation models and growth strategies and M&A strategies. I mean, all those sort of business owner type of activities that are so crucial to their success. We have just a fantastic team that will work with them in each of those different areas to help them and their business in those capacities. And I think the combination of those two things I think are going to be very, very exciting.
On the investment side, along with the fantastic investment services that they're getting from Morningstar, we also have a plethora of what we call wealth management services that we think that the Morningstar advisors are going to find helpful. Those are things like securities lines of credit, you know, high yield cash types of products, tax management services. So we think there's a lot of complimentary wealth management services that go along with the investment services that we think will be also extremely helpful.
VanDerSchie: So, Anthony, you mentioned the high caliber of service and your firms focus on NPS or net promoter score. So maybe let's pivot to what has driven a lot of AssetMark success over the years, which seems to me is advisor centricity. And I know you had recently joined the Morningstar team for our annual sales kickoff meeting and mentioned, and I quote, advisors come to the AssetMark platform for outsourcing. Now, I know you've been in the business AssetMark's been in the business for 30 years. And I'm sure you have a wealth of insights in terms of how AssetMark and your teams have enabled that advisor success over those years. Can you unpack that a little more and maybe share some examples for us?
Huynh: Yeah, absolutely. As I mentioned earlier, you know, outsourcing is one of the primary drivers for advisors who come to AssetMark. Typically, they're making a pretty dramatic change in the way they're running their business, right? They're either rep as PM where they have an internal investment team, and so they've been driving the investments. And so to outsource first and foremost, I think is a big change in their business. And, you know, one of the things that we've done in the past is we've partnered with a third party firm to do an outsourcing study. And we can share those with advisors who are looking to look at that study in more detail. But one of the areas that the outsourcing study has come back that has been very definitive is that advisors who are outsourcing, it has such an incredible impact on their business. They are predominantly making more money, higher levels of income. Their firms are growing a lot faster than firms that are not outsourcing. And so all of those evaluations are a lot higher than non-outsourcing firms. And so they have a tremendous impact on the overall health of the business.
But I would say that the primary stat that really sticks out to me, as I mentioned earlier, outsourcing is about time. It's about time allocation and what you're getting back is time. And so the survey, the results of it is that on average in a week, advisors are getting 11 hours of their time back. I mean, if you think about that, the ability to get 11 hours back into your business and what an advisor can do with an extra 11 hours a week, that just has tremendous impact. And those 11 hours, as mentioned earlier, can go to client servicing, can go to business development, can go to personal work-life balance type of activities. And so I think that's really where the power of outsourcing comes into play is the sort of that sort of time allocation that the advisor gets back.
VanDerSchie: You know, Anthony, when I go through Fidelity's most recent RIA benchmarking study, they agree with almost everything you just said there. It highlights how advisors who are outsourcing experience, faster asset growth, higher revenue, increased client acquisition. And so maybe, Jonathan, from your perspective, what's happening behind the scenes that's driving all that.
Linstra: Yeah, that's a great question. And look, I believe this growth and if you call it success and outsourcing is really stemming from the fact that more advisors are really listening to their clients and prioritizing what clients are really looking for in advisor and as an advisor, better understanding their own value. You know, I really appreciated what Anthony was saying earlier in the simple but effective example of, you know, being a chef versus running a restaurant. And maybe expounding on that a little bit more digging into that perspective a little differently. You know, for much of my career, I wholesaled advisors for many years and one key diagnostic question that I found helpful in working with advisors was when I asked, if I were to force you today to choose, would you consider yourself more of an investment manager or a relationship manager? Now, I don't know what you, how most of the audience would answer that question. But the answer I got most often was well, I'm both, right? And if pressed and digging in deeper, most would readily admit then that in all honesty, they would view themselves ultimately more of as a relationship manager, which I think is true and right and which is playing into this growth in outsourcing.
I don't think it's a unique notion that, time is certainly the most precious commodity in all of our lives, irrespective of our work and our personal lives. But that's also true for advisors. And clients are increasingly expecting more and more from their advisory relationships, especially, you know, as you look back 10, 20, 30 years ago and what it meant to work with a financial advisor. And, the benchmarking study you referenced, Nick is certainly highlighting that I know, (Suruli) and others have done a number of other reports on this, but really digging into this and highlighting the fact that other services versus investment management are actually what clients view as most important to that advisor client relationship, you know, whether that be holistic financial planning, estate planning, college planning, concierge services, and essentially the advisor becoming the client's trusted source for all financial matters. And so, yes, investment management is a component of that, but it's only just that, right?
It's only one component. So the question for advisors really is, how do you deliver the breadth and depth of engagement and relationship that you and your team are spending with the majority of your time, when you and your team are spending the majority of time sourcing investments, and trying to meet that need conducting due diligence, meeting with investment managers, taking new client meetings. Nick, I think it's pretty obvious the answer is you can't, it's just not scalable. And in fact, your clients are saying it's not necessarily the primary reason they're even working with you.
VanDerSchie: So sticking with the Fidelity survey data for just one minute, it shows that business development and business planning are two of the biggest priority areas that have really grown in terms of advisors' desire to spend time on them over the last 10 years while improving investment performance, which you just referenced, Jonathan, has dropped to sixth on the list of priorities that advisors are focused on. And Anthony, maybe, one study is just one study, but curious if you see those Fidelity trends being mimicked on the AssetMark platform through your advisors.
Huynh: Yeah, 100% they do. You know, I think business development, planning, those are the areas that advisors are focused on. And, Jonathan referenced this earlier, there's so much commoditization, in our business today, especially on the investment side. The one area that I think ultimately when clients are trying to decide who they want to work with as a financial advisor, to me, it really comes down to the experience, right, the client experience that that advisor is able to deliver from a servicing perspective in every way. And so, you know, for us, what we try to do is help the advisor outsource the parts of their business that they can outsource, give them back the time that they're able to then work on the other areas, such as the client experience, that's going to allow them to sort of really differentiate with their clients. You know, clients really need help in a way that I think is more personalized than there's ever been in the past. Every situation is quite unique. And so I think the ability to sort of really have that client-centric focus practice is something that's going to benefit all advisors.
VanDerSchie: And Anthony, I want to come back to something that you said. You mentioned this observation of investment management commoditization in the industry. And, you know, maybe I'll throw the question to you, Jonathan. Do you think investment performance no longer matters? Can advisors just, you know, buy an index and forget the rest?
Linstra: Oh, there are a few key firms in particular, Nick, that I think would like exactly just that. It just doesn't matter anymore. Look, I don't know a single person, including the three of us, right, who would say that investment performance no longer matters. It always matters. It's the reason we invest, right? To be good stewards with the capital we have, irrespective of the amount we have, right, to grow it, to protect it, et cetera. And, even with indexing, for example, as you mentioned, there are still active decisions to be made, right, even when investing in passive instruments potentially. And so, how do you know which index to select, when do you buy, when do you sell, how should the market environment play into your index selection. So when we talk about performance, of course, it's critically important. But what's as important, if not more so, is how did that manager achieve that performance? You know, what risk did the client take on to achieve that performance? And how does that accurately align with their risk tolerance, frankly, or not? And so, those are really important considerations.
And so before we throw out the importance of performance, we really need to look at the how, how we are delivering performance to our clients, and are they taking the appropriate risk that aligns with their beliefs and life stage, et cetera. I'd suggest that what advisors might be saying in relation to this devaluing of the importance of improving investment performance is that in actuality, they expect great and reasonable performance from every investment manager. And so that's now become just the table stakes.
VanDerSchie: So while we're on the topic of investments, Jonathan, you know, one of the observed differentiated aspects of the AssetMark platform is the fact that they have a curated lineup of managers and investment choices. And, you could say that's different than some other managed account platforms with more choice and a longer lineup of managers and models. You know, Anthony, I'll just ask you, why have you taken such a curated approach to building out your product shelf and how do advisors respond to that versus a larger supermarket like approach from other platforms?
Huynh: Yeah, that's a fantastic question. And we get asked that, you know, quite a bit. And so I would say that when it comes to investments, I think most advisors are looking for two things. They want choice and flexibility, but they're also looking for guidance. And so for us, we offer a choice, we offer flexibility, there's a plethora of investment options on our platform. But for advisors that are looking to outsource, they really want that guidance, they want some help. And so the idea that, to give them, too much choice, as I always like to say, choice and complexity, they're next door neighbors, they live really close to each other. As much as people want choice, they get overwhelmed with it and it becomes complex. And so one of the ways we try to help advisors is through that guidance. And one of the ways we deliver guidance is with due diligence on our platform.
And so instead of offering hundreds and hundreds of options, we want to offer a much smaller list of best in class. And so, our teams led by, and I'm clearly biased, what I think is the best due diligence team, in the industry with Zoe Brunson and her team, they do a fantastic job of that due diligence. And, when it comes to due diligence, I think there's a lot of platforms that say they do it, but there's three areas you want to ask how they're doing it. You know, one is adding managers, two is maintaining them, and three is replacing them. And I would say adding is an area most firms are really good at. Maintaining is one of the things that is really important to make sure that they're in good standing and everything is where it needs to be.
But the last area is the replacing. And I would just share with advisors that if you're working with an organization that says that they're going to do due diligence, the first question I would ask is show me the managers that you've been replacing, right? Who are some examples of the managers you replaced and why? Because that's one of the areas that we put a lot of focus on, not because we want to replace managers, but we know that from time to time it's going to be necessary. And so we always share with the advisors that we work with a list of the entire history of our platform. Every single strategist that we've had to replace and the reasons why. And those reasons range for a variety of different things. They're not just performance, they're personnel changes, they're organizational changes, process changes, all the things that you would expect the due diligence firm to maintain and keep an eye on your behalf. And so that curated platform and that guidance, we believe is what advisors are looking for because again, they want choice, but they don't want complexity. And so that guidance we think helps alleviate a little bit of that complexity.
VanDerSchie: Thanks, Anthony. So a lot of today's discussion has obviously focused on advisors who are already benefiting from outsourcing, but I do want to flip that a bit and talk about advisors who may be hesitant about moving to this approach for their practice. And Jonathan, when I think about the points of contention, one might be that their practices are giving up some sort of control or perceived control. I guess how should advisors think through that hurdle?
Linstra: Yeah, thanks, Nick. And it's a fair question and a well-known one, but I think one that in all, we've been getting less and less in recent years. But look at, I think a mentor of mine shared with me many years ago, an old adage that what you win clients with is what you win them to. And so for those advisors that maybe built their entire reputation on, I picked the best equities out there. That's a hard obstacle to now cover when they're talking to their clients now about hiring outside investment management firms to run their business. So I think for those advisors, and I think they're, as we've seen in the numbers and referencing in the studies, that's a decreasing number. But nonetheless, they're still out there. But I would view that as taking control and deploying resources differently. So it's not yielding control, it's actually taking control and establishing relationships with well-known, well-staffed experts in the field that have very deep benches. And as Anthony mentioned, Zoe and her team at AssetMark are very impressive, frankly, for the capabilities that Morningstar offers in the due diligence area, in particular, pretty, I would say world-renowned in that in sense from a Morningstar perspective.. And so while they may maintain a portion of what maybe they previously determined as their value, Nick, and having their own alpha plays or their own best top picks, for the majority of their practices, they'd be well-served to consider outsourcing.
VanDerSchie: And Anthony, your team is in the field all day, every day. Do you have any examples or case studies worth sharing, maybe specifically where advisors have been more skeptical about moving forward with this approach and then ultimately dip their toe in the water?
Huynh: Yeah, absolutely. I'm glad you asked this question. This concept of control is probably the biggest hurdle we run into when we're having the outsourcing conversation. And I actually really think this is a big misconception is that if you outsource, you completely give up sort of control. And that's not the case at all. Because the advisors on our platform who want to continue, so we certainly have advisors who say, I don't want to make any investment decisions. I want to outsource everything. And I want to really just almost focus all my time on my clients. And we certainly have options that allow you to do that. But we also have advisors who say, you know what, I don't want to do the day-to-day of running portfolios, the trading, the research, all of those things. But I still have investment opinions. I have investment philosophies that I want to sort of maintain. And so they certainly can still do that on our platform. And so we have a UMA type of structure that allows you to put as many managers as you want into a single account. And those managers each have their own specialty, right?
There are mutual funds, ETF, individual securities, so different levels of vehicle. There's also managers that are internationally biased, domestically biased, et cetera. And so if you have a philosophy that you want to execute on, you certainly can still do that from an investment perspective. It's really, instead of managing your rep as PM portfolio by picking ETFs or maybe mutual funds that you're doing today, you're just almost replacing that by picking strategists or managers inside a UMA shell. And so this idea of giving up complete control on the investment side, I don't think is completely accurate because we have advisors that are on our platform that are using only certain types of managers and they're tilting their portfolios in a very specific way that aligns with their investment beliefs. And so there really is still a quite a level of control that you have from an investment perspective if you choose that that's the way you want to utilize the platform.
VanDerSchie: Yeah, that makes good sense, Anthony. Leveraging third-party professional managers while still participating in the investment decisions and the account allocations. Okay, so we've covered a lot here. Before we wrap up, Anthony, is there anything else that we haven't covered that you want to touch on?
Huynh: You asked some great questions today, Nick. I think we covered a wide variety of topics here. The only thing I would add is I think for us, our platform is really sort of helping advisors in all aspects of their business. And one of the things that I think all small business owners, as I mentioned earlier, is focused on is just sort of the valuation of their business. And so one of the areas that we work with quite a bit with advisors is constantly looking at how we can help improve those valuations in all aspects. And so we talked about outsourcing investments, we talked about business development, we talked about cost efficiencies. Those are all areas that we're very keen on to help advisors with. And so that's been sort of the legacy of the organization. It's going to be an area we're going to continue to focus on. So we're excited for any advisors who are looking to get our help in those areas. We certainly would love to have the opportunity to do that.
VanDerSchie: And Anthony, if there are listeners out there who want to learn more, what's a good call to action for them?
Huynh: Yeah, reach out to us. I'm sure, Nick, you can share all the different contact information via either website or other ways. Reach out to our sales organization, and we will have one of our members of our team reach out to you. And the first thing they'll do is get to know you and get to know your business and share with you a little bit of how we can help.
VanDerSchie: That's great. And we'll make sure to include those URLs in the show links. Okay, last question. And I realized we're already a month into the year now, a little bit more than a month into the year. But I wanted to ask each of you guys just to close, what are you most excited about for the year ahead? Jonathan, you can lead us off.
Linstra: Most excited for, that's a long list. As far as I tell you what Nick, maybe I know we've been talking a lot about the strategic alliance with AssetMark, and that's really tremendously exciting on how we can grow our businesses, et cetera, and serve more advisors and serve more investors through that. If I'm looking beyond the scope of that and just thinking about the landscape in general in 2025, something our CEO, Kunal Kapoor, talks frequently about these days as the convergence in public and private markets. And frankly, it's really exciting to think about this convergence and what that means for investors and differing structures and strategies that will likely introduce new asset classes to investors in more appropriate forms.
That's one thing. I also think the intersectionality of wealth and retirement is an ongoing reality and one that will continue to progress in 2025. That's really exciting as well. But I guess in more general terms, what motivates me and what I think motivates a lot of my team members and a lot of people at Morningstar is just the increasing demand in need for financial literacy and financial advice by the investing public. I know most of our listening audience are very familiar with this growing need and demand, but I'm thrilled and honored to represent a firm that's really at the epicenter here of this challenge by equipping more advisors and investors with research data insights. And as we spoke of earlier, even actual investments, Nick, delivered by Morningstar that can truly help advisors and investors. So maybe a little directly initially and then indirectly to close, Nick. But thanks again for the time here and for having me and really excited for a great 2025.
VanDerSchie: Yeah. So Jonathan has a long list of things to be excited for in the year ahead. Anthony, what about you?
Huynh: I mean, that's a great list, Jonathan. There's so many things. Anytime there's a new year, I'm super excited. There's so many things happening. I would say that in our industry, I'm excited to see how sort of some of these big trends continue to evolve. We've had this trend of consolidation in our industry. I think that will continue. So excited to sort of continue to see where that sort of takes our industry and how that impacts everybody. More on a micro level. I'm excited about with Morningstar. I really am. Anytime you get the ability to instantly have 2,500 to 3,000 new clients to work with right away, that's exciting. As a sales leader, that's extremely exciting. And so we're really looking forward to that and getting to know those advisors and helping in any way with their practices. And so I think that's exciting.
And then the third thing, more on a maybe on a bigger scale, I've been to a lot of conferences and different events where AI continues to be a big topic and it's a big topic in our firm. I think we've gone from, AI is this kind of big scary thing to, wow, there's some really interesting and cool and efficient things that firms are doing around AI and the efficiencies that has on everyday life, but also on business. And so I'm really excited to see how that evolves because we all know how fast technology sort of moves. So I'm kind of looking forward to seeing how those things sort of play itself out and some of the exciting new tools that are coming from that. So I think, just a great year to look forward to, quite honestly. So looking forward to all those things.
Linstra: See, Nick, we're a couple of sales guys. We got long lists. We're really excited.
VanDerSchie: And there you have it, another episode of Simple, but Not Easy. As always, we thank our guests for their time and engagement. And once again, if you'd like to know more about how Morningstar can support you, please drop us a note at simple@morningstar.com or me directly at nicholas.vanderschie@morningstar.com. That wraps up this week's episode. Before we depart, if you enjoy hearing the insights on our podcast, please consider leaving a five star review on Apple Podcasts or Spotify. Until next time, thanks for listening.
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