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A Marketing Mirage at WSJ

Oct 27, 2017

Rob Pinkerton, Chief Marketing Officer


The Wall Street Journal posted a long article this week about the Morningstar Rating for Funds entitled “The Morningstar Mirage.” You can see the piece and our response. The headline suggests that our star ratings, which evaluate a fund’s past performance, are something other than what we say they are. The story then provides an analysis that 5-star funds outperform 4-star funds which outperform 3-star funds which outperform 2-star funds which beat 1-star funds—or exactly what we say they are. That’s not a mirage. Third-party subject matter experts have addressed the analysis in the article already. Here are a couple from Seeking Alpha and Bloomberg.

As a professional marketer, I appreciate how design and marketing can inspire and reveal. And I make efforts to purposefully avoid the subtle tactics used by firms to titillate and mislead what an offering can do with the aim of creating an exaggerated perception or simplifying complex material. I speak to financial services marketers all the time about how these tactics are hurtful, particularly in the financial services space where predatory lending and opaque pricing make investors susceptible to emotional manipulation or alienation from investing. The marketing campaign behind the Journal’s article offers examples of this behavior.

The Journal’s headline is overstated and uses exaggerated graphics to show our founder adorned in a crown of stars while others plummet to the floor. The Journal began bidding for the Morningstar name on Google search yesterday, which is their right to do. And they are subsequently using our brand name in their ad copy, which we do not believe is their right to do. An active promotional campaign using our brand has cascaded across social channels with a clear intent to drive traffic by using our trusted brand and reputation. My purpose in pointing this out is not to say it is right or wrong, but simply that it is happening so that you can evaluate for yourself how much of this story is news.

Regardless of the conclusion you come to, it’s worth remembering that investing isn’t simple, and it doesn’t lend itself to the pressures of a 24-hour, 140-character news cycle. The star rating is a simple, honest design metaphor that has served investors well. And it’s just a small sampling of the information we offer. We’re committed to using design and marketing techniques to help illuminate investing.

That commitment won’t change because of one story. Our mission is bigger than that.



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