7 Elements of Great Investing Advice

Kunal Kapoor, Morningstar  |   17th Jul 2019  |   4 min read

Everyone in the investment industry loves to hear investors’ success stories, whether they’re about buying a house, helping their kids pay for college, or living a worry-free retirement. These stories are the reason why all of us at Morningstar come to work every day, and they motivate us to do everything we can to empower investor success.

But these stories are less common than they should be. Most investors just aren’t getting the results they deserve. According to our research, only 25.6% of U.S. households are on track for retirement success, and just 46% of U.S. households with more than $100,000 in investable assets are prepared.

There’s a huge need for great investing advice, and great advice begins with us. Not just with Morningstar, but with the institutions building investment products; with the plan sponsors trying to help a workforce unlock the power of their retirement plans; and with the advisers who face the push and pull between serving clients and building successful practices. Investors need to be able to trust that everyone up the ladder has their best interests at heart, and we can earn that trust by making a commitment to great advice with every product launch, investment offering, and financial plan.

Here’s what great advice means to Morningstar, and I challenge everyone who serves investors to think about their personal definition of great advice and how to deliver it.

How to recognize great investing advice

  • Great investing advice is transparent. Morningstar will always advocate for transparency, and of course that means eliminating hidden or mysterious fees and obscured relationships. But we also think that great advice is transparent about data privacy: Every investor should have a clear view of how and where their information is being used.
  • Great investing advice is independent. Everyone wins when we put investors first, and conflicted advice is a sure path to loss of trust and diminishing returns. Morningstar is fiercely independent—even when it isn’t easy—and our business has thrived. Investors respect and remember independence, so if the market dips, advisers will still be able to stand on their values, integrity, and reputation.
  • Great investing advice is personal. There’s no such thing as a one-size-fits-all financial plan—there’s no way a strategy designed for mass consumption can account for every variable in someone’s life. But individualized plans are now within reach for everyday investors, thanks to new technology and strategies that let people invest in a way that aligns with not just their financial goals, but their values as well.
  • Great investing advice is patient. Great financial plans don’t just consider today; they consider tomorrow and 20 years from tomorrow. Great advice is built for the long term, because time is one of the most powerful investing tools, and long-term relationships create certainty and mutual trust.
  • Great investing advice is inspiring. Talking about money is intensely personal, and that’s a great opportunity to energize and motivate investors toward their goals. Our behavioral scientists have found that people become more engaged in their financial lives if they can visualize the results of success, and great advice gives them the details that enable them to do that.
  • Great investing advice is straightforward. One of the pillars of Morningstar’s success is our ability to make complex investment information easy to understand and easy to consider. Investors should be able to understand where they are and how they’re doing without deciphering jargon or digging through a pile of spreadsheets.
  • Great investing advice is visionary. Every day it seems like there’s a new investing fad or can’t-miss stock tip being pushed by pundits; all too often they’re just bad, old ideas dressed in new clothes. Great advice stays on top of the latest research, data, and possibilities so investors can seize new advantages as they arise.

The time for great advice is now

The need for great investing advice exists at every corner of our financial lives—from saving, to major life events, to retirement and inheritance planning.

Investors need great advice. And great investing advice makes everyone shine.


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