As a financial advisor, you naturally wear many hats in your business. From managing clients to handling marketing and compliance, it can be easy to get overwhelmed.
Yet, some financial advisors seem to have time to meet clients, prospect for more clients, and have their lives together. How? TAMPs. But, as many as 66% of advisors do not fully understand what turnkey asset management programs or platforms (TAMPs) can do for financial advisors and their clients.
Those who know, know: 75% of financial advisors who outsource investment management to a TAMP are spending more time with their clients. And, they’re seeing the results: 9 out of 10 advisors who outsource report having stronger client relationships, higher retention, and acquire more high-quality clients.
Going back to the question of having their lives together, do financial advisors who outsource report better work-life balance as a result? Yes, 95% report better work-life balance as a result of outsourcing daily investment management responsibilities.
As a financial advisor, you want to focus on revenue-generating activities. The three most important are financial problem-solving, business development, and client relationships. All else should be outsourced.
In this article, we will explore the different types of TAMPs, what they offer advisors and their clients, and how advisors can choose the right TAMP for their firm.
Turnkey asset management platforms (TAMP) provide investment management services to help financial advisors and institutions manage clients’ investments efficiently and consistently. TAMPs handle back-office investment functions and middle-office proposal generation and support, allowing advisors to focus on client relationships and business development.
When you start asking around, depending on whom you ask, you may hear different definitions for a TAMP:
The answer can be all of the above. TAMP products and services vary in everything from the level of due diligence and variety of products to the individual support services.
Here are some of the basic solutions and services that you can expect to receive from any TAMP:
Most TAMPs provide additional tools and services that can help you run your practice more efficiently—client onboarding, account reporting, compliance support, and marketing automation. Additionally, some TAMPs offer advisor education, training programs, peer communities, and client resources to help them stay up-to-date with industry trends and best practices.
Take a moment to consider the additional types of solutions or resources that can help you run your business today and grow for the future.
Whether you’re starting a new practice or simply moving your book of business to a TAMP, you will want to make sure that you are set up for success. Ask about the transition resources and onboarding support that they provide:
TAMPs not only offer differ in their products and services, but also in their due diligence, philosophy, and flexibility. With so many options available, it’s important to assess your needs, priorities, and preferred work style.
Broadly, there are three kinds of TAMPs to consider: the supermarket, the specialist, and the curator.
In the past, advisors would have to identify investment managers, screen them, perform due diligence, and monitor ongoing performance on their own. The first TAMPs served as a sort of middleman between advisors and investment managers.
The original TAMPs could leverage economies of scale to make investment managers more accessible to advisors. An individual retail advisor might not be able to meet the investment minimums set forth by certain investment managers. By bundling advisors and investment managers together, TAMPs increased access for all parties. In its original form, TAMPs were best summarized as an access point. TAMPs filled an unmet need in the financial industry, and it’s clear why they became a popular tool for financial advisors.
Today’s TAMPs are much more than mere access points. Identifying the right investment managers for each client, conducting due diligence, and monitoring performance are still very much part of modern TAMP service offering, but it’s no longer limited to those features. TAMPs have become all-in-one platforms that support advisors at nearly every level of their business.
Research studies and common knowledge of outsourcing tell us of the benefits, such as access to a wider range of investment options, streamlined trading and reporting, and lower operational costs. There are other benefits for advisors that we’ve heard over the years from our customers.
TAMPs allow for more capacity when it comes to client engagement and relationship building. Rather than spending all of your time balancing back-office duties like portfolio management, you can spend your time enhancing client relationships. Building your own client portfolios, pouring over investment research, and allocating clients' assets may seem like a noble aspiration for any advisor, but our data shows it’s a trap: doing it all in-house steals your time, so you’re unable to focus on revenue generating activities like prospecting.
TAMPs thoroughly vet investment managers and strategies. They continually perform extensive research on investment products as part of their routine investment due diligence (link to new due diligence article) to bring on new investment products and keep them on the platform or remove them.
Also, important to note, financial advisors who set up investments and forget them may find themselves under the scrutiny of the SEC. Some broker-dealers may ask their financial advisors to seek outsourcing to handle the regular rebalancing, so as to avoid penalties and maintain compliance with SEC regulations.
Outsourcing can lessen some of the load of compliance allowing advisors to focus on revenue-building initiatives and providing personalized financial advice to clients.
When you leverage a TAMP, you take a weight off the shoulders of you and your team. If a client feels that their portfolio is underperforming or desires a shift in strategy, you’ll be able to select another vetted investment strategy from your TAMP rather than engage in the full due diligence process over again.
Financial advisors who don’t have time for due diligence, often find themselves chasing performance and low fees, without looking at where that performance is coming from—people, philosophy, process, portfolio construction—possibly exposing themselves to undue risk.
A robust set of technology platforms (or fintech stack) is now an expected feature in modern financial advisory practices. As an advisor, you have three choices:
Typically, modern TAMPs provide a proprietary or third-party wealth management platform that you can use to streamline your financial planning processes and client communications. While not every TAMP does this, many will also offer other business support tools or help you select the tools that can work best for your practice.
TAMPs can help you have enough hours back in your day to take a closer look at client accounts and personalize your strategies. This results in a more holistic and comprehensive financial planning experience for clients—and ultimately strengthens the advisor-client relationship.
A TAMP is designed to help you provide better services and solutions to your clients without having to sacrifice your involvement in the process. Although the TAMP provider manages investment portfolios and handles administrative tasks, the financial advisor retains control over the client relationship and still plays an important role in the investment process.
In fact, advisors who outsource investment management report stronger client relationships (83%), higher acquisition of new clients (74%), and increased client retention (82%).
Leading TAMPs support advisors with robust practice management resources and tools. At first blush, it might seem like it's outside of a TAMP’s purview, especially if you’re used to thinking of TAMPs as traditional investment access points. But the most comprehensive TAMPs are dedicated to supporting advisors in every way possible.
Business growth plans, value propositions, client segmentation, human capital decisions are not only huge distractions from the core services that advisors provide, but also often times far from an advisor’s core strengths and experience. Increasingly, TAMPs engage teams of business consultants to assist you with the challenges of business development so that you can return your focus to retaining existing clients, attracting new prospects, and onboarding new clients.
By facilitating the growth, marketing, process improvement, and other functions essential to running a business, these TAMPs help advisors keep their attention on their clients instead of worrying about how to scale sustainably.
While succession may not be something you often think about, it’s exactly the sort of thing successful advisors need to think about. TAMPs offer disciplined and repeatable processes that can help your practice grow, increase its valuation, and retain institutional knowledge as it passes from one owner to the next. This means you can rest easy knowing that your clients (and your clients' money) will have a consistent experience.
What’s more, TAMPs often act as succession consultants for many firms over their life journey.
As an advisor, you can’t “always be on” for your clients, but you can certainly provide them with 24/7 access to tools, dashboards, and resources. And, in today’s world, that level of access has become an expectation.
For financial planners and advisors, TAMPs provide clients with online access to their investment accounts and performance reports. This allows clients to monitor their portfolio performance, review account transactions, and access important documents such as statements and tax forms at any time. TAMPs provide clients with consolidated reporting of all their investments—including those held outside of the TAMP—giving them a comprehensive view of their overall financial picture.
TAMPs offer clients access to a wider range of investment options than they may have had access to before. This can include access to alternative investments, separately managed accounts and institutional funds that are typically not available to individual investors.
Offering more services to your clients is necessary if you want to provide a more holistic solution for financial support and wealth management. TAMPs can offer tax-efficient investment strategies, helping clients to reduce their tax liability and increase their after-tax returns. Many TAMPs offer estate planning services that help clients to plan and manage their assets for future generations.
TAMPs support more communication to help your clients feel in the loop. TAMPs directly improve communication through regular updates, consolidated reports, and personalized communication that can be tailored to each client's unique situation. You can also leverage TAMPs to reduce your back-end management tasks, so you can offer clients more frequent and meaningful touchpoints. Increased communication can lead to improved client satisfaction as well as a deeper understanding of their financial goals and needs.
There are several signs that indicate you may benefit from a TAMP:
If you find yourself agreeing to any of the above statements, it might make sense to look into outsourcing. Your time is valuable, and a TAMP can provide the necessary support and infrastructure to help you focus on important things that require your attention.
With so many different types of TAMP to choose from and solutions available on the market, it’s important to do your due diligence under the new SEC third-party due diligence documentation requirements (link to new due diligence article). You can evaluate TAMPs based on their service offerings, investment solutions, fees, technology capabilities, and support services. Remember—it's important to find a TAMP that supports you and your client’s needs.
As one of the leading TAMPs for over 20 years, AssetMark can help you explore the tools and services that are right for your practice, as well as perform a business model analysis to determine how outsourcing will impact your revenue, operations, and valuation. To get a custom evaluation with industry benchmarks, request a consultation with our team.
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To help advisors learn more about TAMPs and how they can benefit their practice, we have created a comprehensive guide, "A Game-Changer for Your Practice: How TAMPs Are Disrupting the Industry and Supporting Financial Advisors in the New Era. This guide provides an in-depth look at the benefits of using a TAMP, how to choose the right one for your practice, and why this trending tool is here to stay. Give it a read and learn how financial professionals can take their practice to the next level, make time for new clients, and grow their business with the help of a TAMP.
What sets AssetMark apart from other TAMPs? Our approach is truly focused on enabling financial advisors with comprehensive and transformative support. We don’t force advisors to take a one-size-fits-all approach, and we don’t leave advisors to do all the work on their own. Instead, we provide a curated experience strategically adjusted to the individual financial advisor’s practice.
Our approach is centered around service—the financial advisors we work with are dedicated to serving their clients, and we are committed to customized service for advisors, so they can best serve their clients and run their businesses. A curated range of investment strategies, compelling digital technology, and business consulting helps you streamline front-, mid-, and back-office tasks so you can grow your practice and deliver an unparalleled experience to your clients.
As part of our advisor-first commitment, we focus on providing a sense of community. Financial advising can be an isolating experience. If you’re the expert, who do you go to for advice? The professionals at AssetMark are always available to talk, but we also host numerous networking events to ensure that our advisors are talking to and learning from one another and together. As a result, your clients can always enjoy current industry best practices.
Lastly, we’re growth oriented. When we work with an advisor, our goal is to help advisors each their goals for their businesses. Some TAMPs simply slot into a practice’s existing business structure and keep the status quo going. We become a true consultative guide and identify the best opportunities for growth.
These are impactful benefits, but the only way to truly know whether AssetMark is a good fit for your financial advisory practice is to talk with one of our professional consultants. Reach out and request a consultation today.
AssetMark, Inc. ("AssetMark") is a leading provider of extensive wealth management and technology solutions that help financial advisors meet the ever-changing needs of their clients and businesses. The information on this website is for informational purposes only and is intended as an overview of the services offered to financial advisors, not a solicitation for investment. Information has been drawn from sources believed to be reliable, but its accuracy is not guaranteed and is subject to change.
Advisors seeking more information about AssetMark’s services should contact us; individual investors should consult with their financial advisor.
AssetMark is an investment adviser registered with the U.S. Securities and Exchange Commission. Visit our ownership page for more information.
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