Turnkey Asset Management Program (TAMP)

What Is a Turnkey Asset Management Program (TAMP)?

A turnkey asset management program offers a fee-account technology platform that financial advisers, merchant vendors, insurance companies, banks, law firms, and CPA firms can use to regulate their clients' investment accounts.

Turnkey asset management programs are intended to assist financial experts with saving time and permit them to zero in on providing clients with service in their areas of mastery, which may not include asset management tasks like investment research and portfolio allocation. At the end of the day, TAMPs let financial experts and firms delegate asset management and research liabilities to another party that specializes in those areas.

Understanding Turnkey Asset Management Programs (TAMPs)

Delegating the job of asset manager to a TAMP can help financial experts and firms to increase profitability by freeing up additional opportunity for tasks like attracting new clients and meeting with clients in person. These programs can likewise set aside their clients cash since developing a proprietary asset management system can be costly, especially in the event that the company doesn't as of now have one in place. TAMPs additionally handle account administration, billing, and reporting.

Using TAMPs additionally assists wealth advisers with limiting their risk of being sued for poor investment performance. By outsourcing investment selection and management, firms can transfer part of that risk to the TAMP. Major turnkey asset management program suppliers include Envestnet, SEI, AssetMark Investment Services, Brinker Capital, and Orion Portfolio Solutions.

Types of Turnkey Asset Management Programs (TAMPs)

Mutual fund wraps, exchange traded fund wraps, separately managed accounts, unified managed accounts, and unified managed households are five types of turnkey asset management programs.

1. Mutual Fund Wrap Accounts

A mutual fund wrap account is a TAMP that offers numerous mutual funds with the fees encompassing "wrapping around" the investor's all's mutual fund trading, as opposed to having to pay individual fees for each mutual fund, subsequently reducing overall fees.

2. Exchange Traded Fund Wrap Accounts

Exchange traded fund (ETF) wrap accounts work in a similar way as mutual fund wrap accounts however investment decisions are limited exclusively to ETFs rather than mutual funds.

3. Separately Managed Accounts (SMAs)

Separately managed accounts (SMA) are geared to high-even out investors — those with a lot of capital available for investing. SMAs operate in basically the same manner to mutual funds with the exception of where a mutual fund is owned by pooled investors, a separately managed account is owned simply by one investor.

4. Unified Managed Accounts (UMAs)

Unified managed accounts hold a wide range of investments that are allocated to their own bucket. One bucket would have stocks, for instance, while another bucket would have bonds, and another would have derivatives. UMAs aggregate the entirety of an investor's assets yet permit them to be managed separately.

5. Unified Managed Household (UMH)

As the name suggests, an UMH is intended to handle the investments of different individuals of one household. This would include parents and children and potentially grandparents assuming that they are in a similar household.

Special Considerations

TAMPs are available in both off-the-rack and altered assortments. They are much of the time privately named, meaning that it isn't apparent to clients that an outsider is handling their investments. Moreover, these programs serve a wide range of investors, from mass-market, lower net worth clients to ultra-high-net-worth individuals.

TAMPs give base technology and extra "back office" support, for example, setting up automated cautions, asset tracking and reporting, and other dashboard highlights. The service could likewise include supplying recommendations, wealth management devices, compliance services, investment policy statements, and could likewise conduct a risk analysis.

TAMPs regularly charge somewhere in the range of 0.45% and 2.5% for their services.

These benefits can extraordinarily further develop an investment advisory firm, however they accompany costs, and managers need to determine whether that extra cost is worth what they receive in return, which includes time saved to have the option to create more business.

Advantages and Disadvantages of TAMPs

TAMPs give a critical advantage to advisors as they consider the outsourcing of different capabilities, for example, reporting, that opens up a lot of time for an advisor that they can use to gain more clients or spend additional time focusing on their client's investments, which benefits the client in the end.

TAMPs can likewise be cost-powerful. By outsourcing capabilities to a TAMP, an advisor will keep away from the cost of having to set up such capabilities in-house, which can include hiring more employees, providing more benefits, etc. In the end, this could reduce their above; savings that they can technically go to their clients.

As an investor, it's important to comprehend your fee structure. In the event that your advisor utilizes a TAMP, check to check whether the fees they pay are gone to you or not. Assuming this is the case, that could be a disadvantage, making your investments more costly.

At the point when an advisor utilizes a TAMP, the advisor has less control of the investment strategy. It's important to check assuming the TAMPs investment strategy reflects that of your risk tolerance and investment objectives.

Turnkey Asset Management Programs (TAMPs) FAQs

What Are the Largest TAMPs?

The biggest TAMPs are 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?

Choosing the right TAMP as an advisor is based on a ton of factors. Consider how the TAMP lines up with your investment strategy, the type of relationship the TAMP will have with your custodian, the fees the TAMP charges, assuming that the TAMP chips away at your internal platform, what extra services does the TAMP give, what is their support management like, and do they offer extra technology.

When Did Turnkey Asset Management Programs Start?

Turnkey asset management programs began in the mid 1980s.

The Bottom Line

Turnkey asset management programs (TAMPs) are investment solutions that financial institutions can use to assist with managing their client's investment accounts. TAMPs are fee-based services and can furnish investment advisors with a small bunch of services to assist them with bettering their services. In choosing a TAMP, an advisor ought to think about the costs, investment strategies, and different services the TAMP gives to determine whether it is the right solution for themselves and for their clients.

Highlights

• Turnkey asset management programs are fee-based platforms for asset managers, specialist sellers, CPAs, and other financial experts.
• By working with an outsider, the client of a turnkey asset management program is giving up some control of a portion of the dynamic cycle, while likewise paying a fee for the service.
• Envestnet, SEI, AssetMark, Brinker Capital, and Orion Portfolio Solutions are instances of TAMP suppliers.
• TAMPs can offer technology, administrative center support, and tasks like investment research and asset allocation.
• Turnkey asset management programs can assist firms with saving time and permit them to zero in a greater amount of their energy on finding new clients and servicing existing ones.