Program for Turnkey Asset Management (Detailed Guide for TAMP)

 Financial advisors, broker-dealers, insurance companies, banks, law firms, and CPA firms can use a turnkey asset management program's fee-account technology platform to handle the investment accounts of their customers.

Program for Turnkey Asset Management (Detailed Guide for TAMP)

Financial professionals may focus on serving customers in their areas of specialty, which may not involve asset management activities like investment research and portfolio allocation, with the support of turnkey asset management solutions that are meant to help them save time. TAMPs, in other words, allow financial experts and organizations to transfer asset management and research obligations to a third party that specializes in those fields.

Learning About TAMPs

By giving financial professionals and businesses more time to devote to activities like acquiring new customers and having face-to-face meetings with clients, outsourcing the asset management function to a TAMP can assist them in growing their profitability. 

These systems may also save their clients money because establishing a customized asset management system can be costly, particularly if the organization does not already have one. Account management, billing, and reporting are likewise handled by TAMPs.

TAMPs can assist financial advisers to reduce their risk of being sued for poor investment performance. Firms can shift some of the risks to the TAMP by outsourcing investment selection and management. Envestnet, SEI, AssetMark Investment Services, Brinker Capital, and Orion Portfolio Solutions are among the major turnkey asset management program providers.

Turnkey Asset Management Program Varieties

Turnkey asset management solutions are classified into five types: mutual fund wraps, exchange traded fund wraps, independently managed accounts, unified managed accounts, and unified managed households.

Wrap Accounts for Mutual Funds

A TAMP that provides numerous mutual funds and has costs that cover all of the client's mutual fund trading, rather than requiring the investor to pay separate fees for each mutual fund, is known as a mutual fund wrap account. This lowers total expenses.

Wrap Accounts for Exchange Traded Funds

The operation of exchange-traded fund (ETF) wrap accounts is similar to that of mutual fund wrap accounts, with the exception that ETFs, not mutual funds, is the only available investments.

Accounts Managed Separately (SMAs)

SMAs, or separately managed accounts, are designed for high-level investors with a sizable amount of accessible cash. SMAs work similarly to mutual funds, with the exception that, although a mutual fund is held by a group of investors, a separately managed account is owned by a single owner.

Accounts Managed Collectively (UMAs)

Diverse investments are held in unified managed accounts and each is allotted to a separate bucket. For example, equities would go into one bucket, bonds into another, and derivatives into still another. UMAs pool all of an investor's assets yet allow them to be handled independently.

Managed by One Organization (UMH)

Unified Managed Household (UMH)  This includes parents and children, as well as grandparents if they live in the same family.

TAMP Benefits and Drawbacks

TAMPs give advisors a big advantage since they enable the outsourcing of a number of tasks, such as reporting, which frees up a lot of time that an advisor can use to increase the number of clients they serve or spend more time concentrating on their customers' assets, which ultimately benefits the client.

TAMPs can also be inexpensive. An adviser will save money by outsourcing services to a TAMP rather than setting them up in-house, which might entail hiring more people, giving additional benefits, and so on. In the long run, this may lower their overhead, saving them money that they might theoretically pass along to their customers.

It is critical for you to understand your cost structure as an investor. If your adviser utilizes a TAMP, find out whether the costs they pay are passed on to you. If so, this might be a drawback, increasing the cost of your assets.

The adviser has less influence over the investing plan when using a TAMP. It is critical to determine whether the TAMPs investing plan matches your risk tolerance and investment objectives.

Which TAMPs Are the Biggest?

Mount Yale Capital Group, Adhesion Wealth, Matson Money, Sawtooth Solutions, Orion Portfolio, Buckingham Strategic Partners, AssetMark, Independent Advisor Solution by SEI, and Envestnet are the major TAMPs.

What Factors Influence TAMP Selection?

A variety of things must be considered while selecting the best TAMP as an advisor. Take into account how the TAMP fits into your investment plan, the kind of connection the TAMP will have with your custodian, the fees the TAMP charges, whether or not the TAMP uses your internal platform, what extra services the TAMP offers, how their support management operates, and whether or not they supply additional technologies.