Morningstar’s Principia Gets Asset Allocation Module

Morningstar, Inc. introduced Principia Asset Allocation, a new module for the financial planning resource that helps advisers create individualized asset allocation strategies based on a client's personal circumstances, including risk tolerance, current assets, and future needs.

The module utilizes Ibbotson Associates’ optimization and wealth forecasting engine, the company said. Advisers are able to determine an asset mix most likely to achieve the highest return for a given level of risk for clients by using the optimization engine and graphing function.

Monte Carlo wealth forecasting allows advisers to simulate the potential performance of both taxable and tax-deferred portfolios, taking into account the impact of such factors as inflation, taxes, and future savings on a client’s ending wealth level, a company announcement said. The program also allows advisers to generate customized reports to present investment plans to clients.

Principia, a desktop software program for financial advisers, gives advisers the ability to conduct advanced research and analysis, monitor portfolios, and propose investment strategies by accessing a research database that includes mutual funds, stocks, exchange-traded funds, variable annuities, closed-end funds, and separately managed accounts.

In 2005, Morningstar added a Defined Contribution Plans module to the program that helps financial advisors to DC plans evaluate a plan’s fund lineup and build a recommended list of investments. That module provides information on diversification across asset classes, styles, and regions, quality of investment options, and fees associated with the plan and its investment options.

Principia Asset Allocation module costs $995 per year. More information is available at: