Morningstar bets on advice software

The research house is set to acquire AdviserLogic as it looks to add financial planning software to its adviser offering.

Morningstar has entered a definitive agreement to acquire AdviserLogic for undisclosed terms, with the transaction expected to close by month end.

AdviserLogic co-founder Gundeep Sidhu will leave the company. The other co-founder and current chief executive Daniel Gara will stay and lead the product development and go-to-market efforts for AdviserLogic.

In all, over 80 AdviserLogic staff across Australia and India will move to being employed by Morningstar.

"The high-level reason for the acquisition is that with the fragmentation in advice, pressure to meet compliance and education requirements, software is going to be crucial in delivering advice," Morningstar Australasia managing director Jamie Wickham told Financial Standard.

AdviserLogic has three main applications: AdviserLogic (financial planning software and the company's core offering), PayLogic (revenue management software) and DataLogic (software that collects, aggregates and normalises data from platforms, fund managers, brokers and other sources).

Its software is used by about 1500 users, which are mostly authorised representatives and their support staff.

Morningstar, on the other hand, works with advisers through two main offerings: the Adviser Research Centre (ARC) which offers research, data and tools and Morningstar Direct, which helps advisers or licensees construct client portfolios and monitor approved product lists.

It reaches about 60% of the advisers in Australia, Wickham said citing InvestmentTrends.

"The reason why AdviserLogic specifically is that one, they have built a strong presence in the independent financial adviser market. And two, the way their software stack is built is very modern with [well developed] adviser workflow and user interface," Wickham said.

The company will integrate AdviserLogic's capabilities into its own products for advisers. It plans to keep all three applications.

Gara will lead AdviserLogic's product development pipeline.

Two projects that AdviserLogic is looking at right now are: building adviser efficiency dashboards for licensees and a client portal for advisers to engage with their clients, according to Wickham.

"Joining forces with Morningstar will accelerate the development of our financial planning solution," Gara said in a statement.

"Our focus on the advice workflow has earned us a loyal client base with leading customer satisfaction scores. As part of Morningstar, AdviserLogic clients will benefit from additional investment and the depth and breadth of Morningstar's capabilities."

Morningstar declined to comment on AdviserLogic's revenue.

AdviserLogic is owned 50-50 by Gara and Sidhu.

Sidhu will focus on his new proptech startup NowYouCan which offers integrated software for facilities management.

Read more: AdviserLogicDaniel GaraGundeep SidhuJamie WickhamMorningstar Australasia
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