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declines. They found that sharp declines happened about 10 times more often than common models predict on a monthly basis and three times more often on an annual basis. We’ve now modeled return distributions with “fat tails” that better refl ect market behavior, which we believe will produce better investment decisions and be a competitive advantage for our research teams. 

We’re seeing increased interest in Ibbotson’s Wealth Forecasting Engine, which provides retirement advice for Ibbotson’s managed retirement account business. But we also license the software engine separately and use it in Morningstar Advisor Workstation. Last year, we signed on major clients in the UK and Hong Kong who will build our engine into their applications. The Wealth Forecasting Engine handles both pre- and post- retirement advice, and taxable and tax-free advice. It can also incorporate annuities into an asset allocation. That’s important for the growing number of investors in retirement who want to hedge their longevity risk. 

Morningstar Investment Services ( MIS) rebounded nicely in 2010 as well. This business is a “TAMP” or turnkey asset management program—a large and growing part of the advisor marketplace. Advisors can outsource all or part of their investment management work to us. Assets were up 29% to $2.7 billion. We expanded our advisor relationships 11% to 2,100 and number of accounts 16% to 19,000. 

This is a great service for advisors. Our analyst team spends much time visiting, tracking, and analyzing managers. It’s diffi cult or impossible for a small advisory shop to match our research effort. This frees them up to spend more time on fi nancial planning or other tasks important to their clients. 

