Morningstar alters rating process
TheMorningstarresearch house has announced sweeping changes to its rating of fund managers and their funds in Australia, less than one week after dismissing its head of research, Daisy Chee.
The changes were announced yesterday by the group’s US based managing director, Don Phillips, after Chee was given her marching orders at the research house last week.
The changes will see Morningstar calculate both a three and five year quantitative rating for fund managers, which will then be combined to produce an overall quantitative rating.
Morningstar will also adopt a new process for determining the quantitative ratings.
The process, known as the Morningstar Risk-Adjusted Return (MRAR), will penalise the risks inherent in returns from all funds across all asset classes equally.
The process differs from Morningstar’s previous quantitative assessment methodology, which compared a fund’s risk and return characteristics only against those of similar funds.
The new process will be implemented for all Australian funds rated by Morningstar from the middle of December this year.
Phillips says the new method will bring Morningstar’s Australian operations more into line with the group’s global operations.
However he says Morningstar’s overall star rating of fund managers will continue to be based on a 50/50 split between quantitative and qualitative assessments.
The assurance comes in the face of continuing speculation that Morningstar would pull out of the qualitative rating of fund managers in Australia to more closely reflect its operations in other countries.
Due to legal constraints, Chee was unable to comment on the reasons for her dismissal last week.
Recommended for you
ASIC commissioner Alan Kirkland has detailed the regulator’s intentions to conduct surveillance on licensees and advisers who are recommending managed accounts, noting a review is “warranted and timely” given the sector’s growth.
AMP and HUB24 have shared the areas where they are seeking future adviser growth, with HUB24 targeting adding more than 2,000 advisers to the platform.
Bravura Solutions has appointed a new chair and deputy chair to take over from departing Matthew Quinn, while Shezad Okhai picks up another responsibility.
Two advisers say M&A is becoming a “contact sport” as competition heats up to acquire attractive advice firms, while a lack of new entrants creates roadblocks in organic growth opportunities.
