Morningstar discontinuing CPMS platform at end of 2023

The small but dedicated group of advisors who use Morningstar’s Computerized Portfolio Management Services (CPMS) to pick stocks will have to look elsewhere at the end of next year.

Morningstar is shutting down the CPMS software on Dec. 31, 2023. CPMS allows advisors to select and rank stocks based on various fundamentals and to create and back-test model portfolios. It also allows advisors to check an existing portfolio’s characteristics.

Several ETFs and a mutual fund based on indexes that use CPMS data won’t be affected by the closure, said Scott Mackenzie, president and CEO of Morningstar Canada.

“All we’re shutting down is the software application that utilizes that data, but we’re not getting rid of the data,” he said.

Morningstar acquired CPMS for $16.1 million in 2009, when it had more than 500 clients throughout Canada and the U.S.

Mackenzie said the number of users has been dropping for many years. A lot of the information clients get from CPMS is available in other products.

“There’s also a tendency in the industry moving away from individual stock selection to packaged products,” he said.

Most CPMS clients are individual advisors on annual contracts, rather than corporate subscribers.

Over the next 18 months, Morningstar will look to move those clients to other products that offer similar services. Model portfolios, for example, will be available in Morningstar Direct. Many CPMS clients used the software specifically to collect data, Mackenzie said, and that can be offered more easily through direct data feeds.

While Mackenzie wouldn’t provide the number of users, he said “the number of people we’re talking about is small enough that we can deal with them on a one-to-one basis.”

There will be no layoffs at Morningstar when the software is discontinued, and no write-off either, Mackenzie said, as only the software is being retired.

Mark Burgess

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Mark was the managing editor of Advisor.ca from 2017 to 2024.