Hear From Morningstar CEO Kunal Kapoor at MIC 2026

At an extraordinary pace. I feel like every year I'm here at this conference, I'm asking the existential question of whether we humans are still going to matter or not. And you know, in recent months investors have been skeptical. If you follow the markets and you look at the shares of wealth management firms that are publicly traded, they haven't done so well. And so, you see the following valuations reflecting that skepticism about the value of advice. Now, at the same time, I think building portfolios is as complex and difficult as ever. At this conference, we're going to navigate public and private convergence. We're going to talk about extreme concentration in market leadership. And we're going to talk, as Daniel and Walter just did, about a geopolitical environment that is quite different. So, to me, these forces really point to a single conclusion, which is that humans are going to matter, but the bar is rising for all of us. It's really easy to say trust but verify. What does that really ultimately mean? So, let's start by acknowledging something really important, though, which is that amidst all of this, clients and you are doing pretty well. The reality is markets have been super strong. And when I look around and talk to many advisors and ask about their clients, they'll say that many of their clients are wealthier than they imagined. They're doing better than ever before. And that success is reinforcing your value. I mean, nothing feels better than sitting down with a client and saying, 'You did it. You made it.' And there's a lot of that, I think, going on because of what the markets have delivered. But if you're reading the headlines like I am, or if you just heard the session, you know that beneath the surface, there's a somewhat different dynamic at play. Clients may be feeling successful, but they're not feeling certain. You see this in the headlines. Many are really happy that they got to where they've gotten, but they're not sure how to stay there, or if they're going to stay there, what happens now that they've gotten there. And so today, in a session, we're going to unpack what's behind all of this with our data from our 2026 Investor Perspectives study. But really, what's happening is people are looking for answers. And this is a time when because of AI, it's easy to find a lot of answers. And what I've found is that AI is really particularly good at answering what I'll call first-order questions. Maybe the type of question you'd be asked 30 years ago when a client first walked into your office. What should I buy? How should I think about allocating my money based on certain things? How has something performed? These are increasingly what I think about as the 80% of questions that AI is going to handle well enough. You may not think it's a perfect answer, but for a lot of your clients, it's well enough. Now, the question is, what happens when you get to harder questions? How does everything I own really fit together in that portfolio? Is my portfolio really going to make it through my retirement? Is it going to meet my giving objectives? That is, in my view, the harder 20%. I'll tell you a little story. I'll take a little detour here. So, my son is a runner in college. He's much faster than I am. And he had an injury recently. And so, he went to a doctor, as you would imagine, and got a diagnosis. And he wasn't getting any better. So, he started to do some research on Claude. And he said, 'I think it's the wrong diagnosis.' And so, we took him to another doctor when he came home a few weeks ago. And the doctor said, 'I think you're actually right. And you're going to get an MRI.' So, he got the MRI earlier this week. He got the results from the MRI yesterday morning. He took the results from the MRI and before the doctor had called him, he had put it into Claude. Got him prepared for the call. And when the doctor called him, he was ready to have the conversation. That is what you're likely to face with your clients increasingly as well. So, the harder 20% is going to be the bit that's going to make the difference between portfolios that hold up and advice that matters and when it doesn't. And so, your value, just like that doctor's, has to move up the stack. Because your client is going to come in more prepared than ever before. So, you're not just answering questions. You're detecting now what actually matters. You're not just selecting investments. You're guiding them to outcomes that those investments can deliver. So, the market may still be structurally reliant on a handful of things, but the reality is things have changed a little bit. And look, the environment is much, much harder because even though markets have been well and doing well, that means the future outlook is perhaps more muted. If you look at our capital market assumptions, they suggest that things are going to slow down. Investors may keep doing well. You don't need to have a bear market, but you're not going to earn 10, 12, 14% in the way that you perhaps have for the last few decades. And then you also have stories like the one of SpaceX. Who got a call from a client last week to ask about SpaceX? All right, I'm seeing a lot of hands or a lot of laughing, so I'm going to assume everybody got a call. Well, we were all over it as well because we were getting a lot of calls from many of you and many of our readers were interested in it. Well, first of all, you probably saw that our analyst thought that the stock was coming out overvalued. Turns out it's even more overvalued now. But the real story is that before SpaceX even reached public markets, it spent more than two decades, two decades, 20 years, raising capital privately. So, 10 years ago, it started to show up in some public portfolios. If you own a Fidelity fund or Baron fund, for example, you started to see it in some portfolios. Compare that with what you used to see with an Amazon or a Google 25 years ago. They didn't stay private for that long and they came public much earlier, potentially sharing and compounding in public markets much more so than SpaceX already has. And so, that is not an exception anymore. In the last decade, we have an index called the Morningstar PitchBook Unicorn 30 Index. So, it's got all the unicorns in them. That index has delivered a fivefold gain over that period. In the last 5 years, it has doubled. So, a fivefold return in the last decade and a doubling in the last 2 years. What does that mean? Many companies are staying private longer and reshaping industries even before they get into the hands of your clients' portfolios. And while the headlines are about SpaceX, you should also be paying attention to private credit, which is changing tremendously and becoming a bigger part of the debt capital markets. Our credit rating agency Morningstar DBRS, for example, has seen tremendous activity in what I'll call project financing. So, think of things like infrastructure, bridges, roads, data centers, we were just talking about that. Maybe one day the Bears' new stadium. All those things are really coming out of project financing and asset financing. And this is where you're seeing a lot of capital starting to flow. Now, you might be wondering, are you participating in that? How's it happening? Well, it's starting to happen already. And it's happening in particular in what we call semi-liquid strategies. This is not a Frappuccino at Starbucks. It's a real estate strategy, semi-liquid strategy. They've grown to over 600 billion in assets with nearly 100 funds launched in 2025. Many of you probably have clients in these portfolios. And so, when you have a client asking you about them, what they're really asking is what am I gaining? What am I losing? And most importantly, is it really worth it? And the answer is quite complicated in that sense. I'll draw your attention, though, to our new state of semi-liquid funds report. It was just published yesterday. It's one of my favorite reports that we do. We've got a QR code on the back here. In case you haven't read it, I highly encourage it. It's a really good report. And one of the draws, as you can imagine, of a semi-liquid fund is that you can earn a higher return because of the fact that it might own private credit in particular. So, in this paper, what our analysts did is they compared the gross income of a semi-liquid fund strategy with a fully liquid strategy. And voila, what did you find happened? Well, first of all, the semi-liquid fund outperformed by a wide margin. Maybe you were not expecting me to say that, but it did. Then our analysts started to dig deeper, and they found that the semi-liquid fund's complicated fee schedule, which has a lot of incentive fees, actually started to whittle away that advantage. A typical semi-liquid fund costs three times what a liquid alternative would cost. And so, in the example, it actually erased the outperformance of the semi-liquid fund relative to a liquid fund. And that is what you need to care about ultimately, because if you're going to put it in a client's portfolio, that's what matters. And so, to better set investors' expectations, we're developing a methodology to compare these fees across semi-liquid and traditional funds. You're going to see it in our products next month, and it'll be the first in a series of steps that we're going to take to bring more comparability across public and private markets, semi-liquid and liquid investments. So that as you're building portfolios, you can really tell the story. Because many of you who've been here before, who've been investing for a while, know that what happens when a new investment category emerges. Rightly, there might be a compelling narrative, and I think there might be in this case. Funds follow, outcomes though start to vary. People are not confident about what fees look like, and then expectations reset. I've seen this in my career with emerging markets in the 1990s. Then you had liquid alternatives. Then you had hedge fund replication, if anyone remembers that before the global financial crisis. They all to Main Street. I'm going to be there. I think it's going to be one of our most compelling sessions. Tomorrow morning on this stage, I'll be with Blackstone's president John Gray. And I'm going to ask him the hard question about liquidities, structures, and what this convergence really means for the portfolios that all of you are building for your clients. We announced a new partnership that our wealth team will be designing new public-private model portfolios designed to simplify how you gain access to these markets. It's a path that we think can really help investors and drive more investor-centric delivery. It sets a higher standard for these areas. So, our goal at this conference and generally is to arm you with clear answers. Answers that you can't language and markets that deliver good outcomes to you. Because if I'm going to leave you with my one message, it is that AI is making answers easier. Really matter. So, thank you. I hope you have a great conference, and I look forward to seeing all of you in the sessions today. Thank you.