14 Client Questions about TAMPs [with Sample Answers]

Back-office operations in most industries aren’t a topic of conversation with clients. We don’t ask our dentists, real estate agents, or even surgeons about their staff, their process, or whether they outsource certain functions of their business. In the financial industry though, transparency is the cornerstone of trust. We’re here to make transparency easier.

In our many years as a leading outsourcing provider, we’ve heard many times from financial advisors that their clients welcome the extra products and services from outsourcing. But, just in case your clients ask, whenever possible, we like to share with you, resources that can help you. Today, we’re sharing fourteen questions that clients may ask about third-party asset management and sample answers.

How Can I Explain the Value Provided by TAMPs to My Clients?

Explaining the benefits of a TAMP can help your clients feel good about your services and the increased value they get with you as an advisor.

Here are seven client-centric benefits of a TAMP that you should be ready to explain to your clients.

1. Additional Investment Options

TAMPs provide clients of financial advisors with access to a wider range of investment options and portfolio solutions than might be available through individual advisors. TAMPs can help advisors access new and diverse investments that may not be available through traditional channels, providing clients with more opportunities to diversify their portfolios and achieve their goals.

2. Cost Savings

By leveraging TAMPs, advisors can access institutional pricing and enjoy cost efficiencies they might not have had otherwise. A TAMP’s ability to centralize and streamline operations also translates into lower operational costs for fee-based advisors, which may be passed on to clients. In some cases, the streamlined process may lead directly to a lower bill or a higher value for the cost, as the advisor has more time to focus on client touchpoints and account initiatives.

3. Due Diligence

Advisors must follow the fiduciary rule and act in the best interest of their clients. TAMPs provide research and analysis on investment strategies and options that can help advisors make informed investment decisions that are aligned with their clients' goals and objectives. By leveraging a TAMP’s due diligence capabilities, advisors can offer their clients a higher level of research and confidence in their investment strategies.

4. Increased Communication and Transparency

TAMPs can also improve communication and transparency between advisors and their clients with a rich collection of client-facing content. By centralizing client reporting and data, TAMPs can offer clients a more complete view of their investments and performance. This enhanced level of transparency helps increase visibility to strengthen the client-advisor relationship.

5. More Time for Client Touch Points

Additionally, TAMPs can help advisors increase the amount of time they spend on client-facing initiatives by streamlining back-office operations they currently manage in-house. By reducing administrative tasks, TAMPs free up advisors to spend more time with clients, build stronger client relationships, and deliver personalized financial advice.

6. Access to Financial Advisor Technology

TAMPs help advisors deliver a better client experience with access to supportive and user-friendly investment tools. This could include features like financial planning software, risk management tools, and investment analytics. By leveraging TAMPs' technology capabilities, advisors can offer their clients a more modern and sophisticated financial planning experience.

7. A Team of Financial Professionals and Resources

Advisors should be connected to a community of peers as part of their due diligence process. TAMPs can provide access to external resources and a community of advisors that can help you deliver better outcomes for your clients. TAMP providers often have teams of research professionals and business consultants who can offer education and resources on specific investment solutions, asset classes, and growth strategies. Advisors can tap into these resources and deliver a higher level of expertise and guidance to their clients.

More Examples of TAMP Investment Solutions and Features

If you have clients that want to dive further into how TAMPs impact investments, you can share specific examples. Here are five examples of solutions and features that you might use to help support your work on a client’s account.

• Model Portfolios
  TAMPs offer pre-built, cost-effective portfolios that investment advisors can choose from and customize to meet the needs of their clients. This can save advisors initial time in narrowing down the selection to the best-of-class products while still providing clients with diversified investment options.
• Rebalancing
  TAMPs can automate the allocation and rebalancing of client portfolios, ensuring that their investment performance stays aligned with their goals, investment philosophy, and risk tolerance. This can help advisors save time on monitoring accounts and provide a more hands-off approach to serve more client segments.
• Tax Optimization
  TAMPs can help advisors manage client tax liabilities by utilizing automated tax-efficient investment strategies, such as tax-loss harvesting and asset location. This can potentially increase returns for clients.
• Risk Management
  TAMPs offer a variety of tools and resources to help advisors manage client risk, including risk tolerance assessments, risk models, and risk reporting. This can help advisors provide a more comprehensive investment approach and manage client expectations.
• Reporting and Analytics
  TAMPs provide financial professionals with detailed performance reporting and analytics, giving them insight into their clients' assets to help them make data-driven decisions. This enables advisors to provide better services to clients and can help improve their investment portfolio performance.

14 Client Questions about TAMPs (with Answers)

Proactive communication goes a long way in helping your clients feel informed while reducing the chance of confusion, assumptions, or unspoken concerns. Client satisfaction is key to your profitability and how you build your business.

It’s very possible your clients have never heard of a TAMP, so “turnkey asset management platform” (or “turnkey asset management program”) may not mean very much to them, nor third-party asset management. If they have heard of TAMPs, they may not know how a TAMP works—much less how it can make you more effective as an advisor.

Some clients may feel curious about why you are choosing to go with a TAMP. If you didn’t use one before, why start using one now? A good advisor needs to be completely transparent about expenses and fees for their clients. When you can explain the value of the tools you use, your clients will have fewer concerns and understand how a TAMP helps reduce the cost in the long run.

Here is a comprehensive list of questions you may get from clients and how you can provide some clarity.

1. “What is third-party asset management or a TAMP?”
   A TAMP is an all-in-one platform for managing your money and tracking performance. Instead of having to track and manage multiple investment accounts, a TAMP consolidates many tools into one place for advisory firms.
   Plus, TAMPs can provide us with access to additional investments and resources, like investment research and advanced reporting tools, which can help us make more informed decisions on your behalf. Ultimately, a TAMP is designed to help make the investment management process more effective, efficient, and transparent for everyone involved.
2. “How will using a TAMP benefit me as an investor?” 
   Having a third-party asset management platform running our back-end can benefit you as an investor in several ways. It provides access to a broader range of investment options, professional portfolio management, and customized investment strategies tailored to your goals and risk tolerance. It also helps ensure your portfolio stays aligned with your objectives through automated rebalancing and regular monitoring.
3. "How does using a TAMP fit into my overall investment strategy, and what are the potential risks and benefits?"
   Using a TAMP can play a crucial role in implementing your investment strategy. It provides professional management, access to a broader range of investment options, and automated processes that help ensure your portfolio aligns with your goals. The potential benefits include enhanced diversification, disciplined investment management, and access to expertise that can help you navigate market complexities. 
   Risks associated with TAMPs are similar to those of any investment strategy, such as market volatility and potential investment losses.
4. “How does the TAMP provider charge for their services, and what are the costs associated with using a TAMP?"
   TAMPs typically charge fees for their services, and the fee structure can vary. Common fee structures include asset-based fees (charged as a percentage of your invested assets) and flat fees. The specific costs associated with using a TAMP depend on factors such as the size of your investment, the complexity of your portfolio, and the services provided. It's important to review and understand the fee schedule and any additional costs, such as transaction fees or platform fees.
5. “Does this increase costs for me?”
   You’ll see a line-item cost to cover the TAMP on your bill. The costs associated with using a TAMP can vary depending on the specific TAMP and fee structure. While there may be fees associated with utilizing a TAMP's services, TAMPs often provide access to institutional pricing on investments, which alongside the increased service can lead to improved value for your dollar.
6. “How does a TAMP work?” 
   A TAMP, or turnkey asset management platform, provides financial advisors with a comprehensive set of tools and services to manage their clients' investments more efficiently. The TAMP typically offers a range of investment options, portfolio management technology, trading capabilities, and support services. Advisors utilize the TAMP to select suitable investments, build portfolios, monitor performance, and implement investment strategies on behalf of their clients.
7. “Who manages my investments?”
   When using a TAMP, your investments are typically managed by a team of experienced investment professionals employed by the TAMP. These professionals often have extensive industry experience, relevant credentials (such as CFA or CFP designations), and a track record of managing client assets successfully. The TAMP ensures that their investment team has the necessary expertise to make informed investment decisions on your behalf.
8. “Are you not actively managing my portfolio?”
   I am still actively involved in managing your portfolio. While the day-to-day investment management tasks may be executed by the TAMP's investment team, I maintain control over investment decisions, monitor your portfolio's performance, and align it with your goals and risk tolerance. 
   As a financial advisor, I work with a TAMP to provide a range of investment solutions that go beyond basic portfolio management. The TAMP provides support and resources to assist advisors in delivering personalized portfolio management services. While I still actively manage your portfolio, the TAMP provides additional support in areas such as due diligence, investment options, and technology.
9. “Does this affect our level of control over my investments?” 
   As a financial advisor using a TAMP, we maintain control over key aspects of your investments. While the TAMP handles day-to-day management, you retain control over investment objectives, risk tolerance, and any investment restrictions or preferences you may have. The TAMP's role is to implement and execute your investment strategy within the agreed-upon parameters.
10. “What investment options are available through TAMPs, and how are they selected?” 
    TAMPs typically offer a wide array of investment options, including mutual funds, exchange-traded funds (ETFs), separately managed accounts (SMAs), and alternative investments. The specific options available depend on the TAMP. The TAMP's investment team conducts due diligence to select investment options that align with their investment philosophy, performance objectives, and risk parameters.
11. “How does the TAMP provider handle tax reporting and other administrative tasks?” 
    The custodian provides tax reporting services as part of their offering. They generate tax documents, such as Form 1099, and provide them to you for tax filing purposes. Additionally, TAMPs work closely with custodians to handle other administrative tasks related to your investments, such as processing transactions, account paperwork, and maintaining records. This administrative support helps streamline your investment management process.
12. “What is the process for signing up with a TAMP, and how long does it take to get started?” 
    The process for signing up with a TAMP is managed by your financial advisor. It typically involves initial paperwork, establishing your investment goals and risk tolerance, and transferring your existing assets (if applicable). The time to get started can vary, but typically within one workday, depending on the complexity of your situation.
13. "Will the TAMP communicate with me directly?" 
    TAMPs employ various communication channels to interact with clients. This may include regular reports, online portals or apps for accessing account information, email updates, and phone or video conferences with your financial advisor or the TAMP's client support team.
14. "Why do you prefer to use a TAMP? 
    By using a TAMP, I have access to a diverse, curated selection of best-in-class investment strategies and products. This helps me find the solutions that best fit your specific portfolio goals and risk tolerance. And it can help me deliver better portfolio performance, increased transparency, and potentially lower costs.
    A TAMP provides new product ideas for various markets, support with portfolio construction ideas as well. The TAMP also takes care of some of the administrative tasks associated with managing investments, freeing up more of my time to focus on providing you with personalized advice and recommendations. 
    As you know, technology is changing rapidly, and this is an industry-leading solution that helps advisors be more effective and efficient.

Explore Investment Management Outsourcing Solutions

AssetMark is a leading TAMP that provides a wide range of investment solutions and services, enabling financial advisors like you to deliver more value. By outsourcing investment management and leveraging AssetMark's technology, you can focus on building relationships and providing comprehensive financial planning advice to your clients.

AssetMark can help you decide which tools and services are right for your practice. To learn more about what a TAMP can do for you,  request a consultation with our team.