What Is a Turnkey Asset Management Program (TAMP)?

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What Is a Turnkey Asset Management Program (TAMP)?

If you're a financial advisor or broker-dealer, you know managing client investments can eat up a lot of your time. That's where turnkey asset management programs, or TAMPs, come in. These are fee-based services that give you a platform to handle client accounts efficiently. By using a TAMP, you can offload tasks like investment research and portfolio allocation, so you focus on providing top-notch service and bringing in new clients. This setup boosts your profitability and includes full account management, from billing to reporting.

Key Takeaways

Let me break down the essentials for you. TAMPs give you a fee-based way to manage client investments, improving your efficiency and allowing you to concentrate on what matters. They provide technology and back-office support, so you can delegate asset management and save time. Outsourcing to a TAMP helps you reduce risks tied to investment performance, shifting some responsibility away from you. You'll find TAMPs in forms like mutual fund wrap accounts, ETF wrap accounts, separately managed accounts, unified managed accounts, and unified managed households. Sure, they cut costs and enhance service, but remember they involve fees and might limit your control over strategies.

How Turnkey Asset Management Programs (TAMPs) Work

Delegating to a TAMP can directly increase your profitability by freeing up your schedule for client meetings and acquisition. You save money too, since building your own system is expensive if you don't have one already. TAMPs take care of account administration, billing, and reporting for you. They also limit your liability for poor investment results by outsourcing the management and sharing the risk. Providers like Envestnet, SEI, AssetMark Investment Services, Brinker Capital, and Orion Portfolio Solutions are some of the major players in this space.

Exploring Different Types of Turnkey Asset Management Programs (TAMPs)

There are five main types of TAMPs you should know: mutual fund wraps, exchange-traded fund wraps, separately managed accounts, unified managed accounts, and unified managed households.

Types of TAMPs

Mutual Fund Wrap Accounts: This type offers a range of mutual funds where fees wrap around all trading, avoiding individual charges per fund and lowering overall costs.
Exchange Traded Fund Wrap Accounts: These function like mutual fund wraps but restrict investments to ETFs only.
Separately Managed Accounts (SMAs): Aimed at high-net-worth investors with substantial capital, SMAs work like mutual funds but are owned by a single investor, not a pool.
Unified Managed Accounts (UMAs): These hold various investments in separate buckets, like stocks in one and bonds in another, aggregating assets while allowing separate management.
Unified Managed Household (UMH): Designed for multiple household members, such as parents, children, and grandparents, managing their investments together.

Key Factors to Consider in Turnkey Asset Management Programs (TAMPs)

TAMPs come in off-the-shelf or customized options, often privately labeled so clients don't see the third-party involvement. They cater to all investor levels, from everyday clients to ultra-high-net-worth individuals. You get base technology plus back-office support like automated alerts, asset tracking, reporting, and dashboards. Services might include proposals, wealth management tools, compliance, investment policy statements, and risk analysis. Expect costs between 0.45% and 2.5%. These features can strengthen your firm, but you need to assess if the fees justify the time saved for growing your business.

Benefits and Drawbacks of Turnkey Asset Management Programs (TAMPs)

As an advisor, you gain a big edge with TAMPs by outsourcing functions like reporting, which frees up time to attract clients or dive deeper into their needs—ultimately benefiting them. TAMPs are cost-effective too; you avoid the expense of building in-house operations, like hiring staff and managing benefits, potentially lowering your overhead and allowing savings to pass to clients. If you're an investor, check your fee structure—see if TAMP costs get passed on, which could make things pricier. On the downside, using a TAMP means less control over strategies, so ensure it matches your risk tolerance and goals.

What Are the Largest TAMPs?

The biggest TAMPs include Mount Yale Capital Group, Adhesion Wealth, Matson Money, Sawtooth Solutions, Orion Portfolio, Brinker Capital, Buckingham Strategic Partners, AssetMark, Independent Advisor Solution by SEI, and Envestnet.

How Do You Pick a TAMP?

Selecting a TAMP depends on several factors. Look at how it aligns with your investment strategy, its relationship with your custodian, the fees, compatibility with your platform, additional services, support quality, and extra technology offerings.

When Did Turnkey Asset Management Programs Start?

TAMPs began in the early 1980s.

The Bottom Line

Turnkey asset management programs offer you a complete, fee-based way to delegate investment tasks and prioritize client service. Outsourcing reduces overhead and risks, giving you more time to grow your client base. That said, evaluate the costs, services, and how well it fits your strategies and client needs to make sure it truly improves your practice.

What Is a Turnkey Asset Management Program (TAMP)?

Highlights