Accounting and Financial Software
Software helps advisors communicate 529 plan fees and taxes.
Press Release Summary:
Part of Morningstar Advisor Suitability Manager solution, 529 Suitability Manager enables advisors to present to investors, in straightforward reports, disclosures in accordance with new MSRB requirements. Advisor enters relevant information into Web-based tool, and prints summary charts and reports to help choose most suitable 529 plan for investor. Calculator helps determine appropriate dollar amount client needs to save, while Web report provides prospectus, performance, and portfolio data.
Original Press Release:
Morningstar Develops Tool to Help Advisors Communicate 529 Plan Fees and Taxes to Investors, Comply With New MSRB Disclosure Interpretation
CHICAGO, Aug. 14 /-- Morningstar, Inc. (NASDAQ:MORN) announced it has developed a Web-based tool to help financial advisors generate reports to communicate to investors all the fees and state tax benefits associated with 529 college savings plans, in response to the new Municipal Securities Rulemaking Board (MSRB) interpretation that became effective on Monday, Aug. 7. Among other requirements, the new MSRB rule requires brokers, dealers and municipal securities dealers to disclose the state tax benefits that would not be available to the investor as a result of investing in an out-of-state 529 plan. Morningstar's new tool, the 529 Suitability Manager, enables advisors to present these and other disclosures to investors in straightforward, easy-to-read reports.
"We've created a tool for advisors that takes the complexity out of performing a thorough 529 plan suitability analysis for their clients," said Chris Boruff, president of Morningstar's Advisor business. "We believe we're the first company to offer a tool for advisors that provides complete disclosure reports including both fees and state tax benefit information from one source."
Morningstar's 529 Suitability Manager creates disclosure reports that are populated by a simple Web-based interface. The advisor simply enters relevant information about the investor into the Web-based tool, and then prints straightforward summary charts and reports to help choose the most suitable 529 plan for the investor. Key features include:
-- A calculator to help determine the appropriate dollar amount the client needs to save
-- Morningstar Web report with prospectus, performance and underlying portfolio data
-- Plan or portfolio investment detail PDF reports designed for National Association of Securities Dealers (NASD) compliance
-- Three disclosure reports designed to comply with NASD requirements, including:
o Summary report showing advisor-collected information (recommended plan, investment objective, risk tolerance, purchase and tax information, and portfolio allocation)
o "Fees-you-pay" report disclosing all 529 costs in a straightforward format, which is based on the Securities and Exchange Commission's proposed point-of-sale fee disclosure (http://www.sec.gov/rules/proposed/33-8544.htm)
o State tax benefits report disclosing the tax benefits of in-state 529 plans
-- Option to customize disclosure language
529 Suitability Manager is a tool within the Morningstar Advisor Suitability Manager solution, which also provides other investment suitability analyses. 529 Suitability Manager can be co-branded and licensed by institutions for their advisors.
According to research from Investment Company Institute and College Savings Plan Network, the number of 529 plan accounts increased to about 8.6 million in the first quarter of 2006. The average 529 savings plan account size was about $11,500 in March 2006.
More information on MSRB 529 plan disclosure rules is available at: msrb.org/msrb1/mfs/default.asp .
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in the United States and in major international markets. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 145,000 investment offerings, including stocks, mutual funds, and similar vehicles. The company has operations in 13 countries and minority ownership interests in companies in three other countries.
Web site: http://www.morningstar.com/
http://msrb.org/msrb1/mfs/default.asp
http://www.sec.gov/rules/proposed/33-8544.htm
