Independent investment research firm Morningstar has agreed to purchase wealth management platform provider Praemium Limited’s operations in the United Kingdom, Jersey, Hong Kong and Dubai for 35 million pounds ($46.3 million), according to a Tuesday (Dec. 21) press release.
The companies expect to finalize the transaction by the third quarter of 2022.
Praemium offers proprietary, friction-free Software-as-a-Service (SaaS) technology and services used by nearly 500 independent financial advisers. Praemium’s end-to-end solution will add to Morningstar’s existing data, fund profiles, portfolio analytics and investment management capabilities available to advisers, according to the announcement.
Morningstar President of Wealth Management Solutions Daniel Needham said Praemium has a “fast-growing U.K. and international business.”
“Technology is playing a larger role in everyone’s lives, and expectations for how companies deploy it are evolving quickly,” Needham said. “Advisers and the investors we jointly serve are no exception, and Praemium’s digital-first capabilities will allow us to reduce friction, lower costs, provide more choice and improve efficiency for advisers. This gives advisers time back to deliver better advice, empowering investor success.”
Melbourne-based Praemium had previously announced its intention to focus on its domestic growth in the Australian platform market and to sell its international business to a growth buyer, according to the announcement.
The acquisition comes as wealth management platforms are seeing significant growth, according to the announcement. Platform assets in the U.K. have grown 100% in the last five years, exceeding 500 billion pounds ($662.5 billion), according to The Lang Cat.
In an interview with PYMNTS’ Karen Webster last month, David Dindi, CEO of FinTech Atomic, said that wealth building and wealth management niches are ready for modernization. His company’s Investing application programming interface (API) will help level the investment playing field.
Investment firms offering unbundled services will become the new model, Dindi told PYMNTS. By providing a range of customized services, Atomic will be able to serve the full range of users that established investment companies such as Fidelity and Vanguard currently serve.