What is a Turnkey Asset Management Program (TAMP)?

Financial professionals and businesses may boost profitability by assigning a Turnkey Asset Management Program (TAMP) to the position of asset manager, which frees up more time for client meetings and acquisitions. Because creating a custom asset management system may be costly, particularly if the business does not already have one in place, these systems can also help their clients save money. TAMPs also manage reporting, invoicing, and account management.

Wealth advisors may reduce their chance of facing legal action for subpar investment performance by using TAMPs. Businesses may shift a portion of that risk to the Turnkey Asset Management Program (TAMP) by outsourcing the selection and administration of their investments. Among the leading suppliers of turnkey asset management programs are Brinker Capital, Envestnet, SEI, AssetMark Investment Services, and Orion Portfolio Solutions.

Understanding Turnkey Asset Management Programs (TAMPs)

There are five kinds of turnkey asset management programs: mutual fund wraps, exchange-traded fund wraps, separately managed accounts, unified managed accounts, and unified managed households.

Wrap accounts for mutual funds

To reduce total expenses, a mutual fund wrap account, a kind of Turnkey Asset Management Program (TAMP), provides several mutual funds with fees that cover “wrapping around” all of the investor’s mutual fund trading rather than requiring the payment of separate fees for each mutual fund.

Wrap accounts for exchange-traded funds

Wrap accounts for exchange-traded funds (ETFs) function similarly to wrap accounts for mutual funds; however, the only investment options available are ETFs, not mutual funds.

Accounts Managed Differently (SMAs)

Designed for high-level investors or those with substantial cash available for investment, separately managed accounts (SMA) are targeted at them. SMAs function similarly to mutual funds, except that only one investor owns a separately managed account, whereas a group of investors owns mutual funds.

Accounts Managed Unified (UMAs)

Several distinct investments are held in unified managed accounts, each with its own bucket. For example, equities would be in one bucket, bonds in another, and derivatives in another. UMAs combine an investor’s assets, although they may still be handled independently.

Unified Managed Household (UMH)

As the name suggests, a UMH is made to manage the investments of many members of a single household. This would include the parents, kids, and grandparents if they live in the same home.

Particular Points to Remember

There are two types of TAMPs: pre-made and customized. They are frequently privately labeled, so clients must know that a third party manages their investments. Furthermore, these programs cater to a wide range of investors, including people with ultra-high net worth and mass-market clientele with lesser net worth.

In addition to essential technologies, TAMPs provide extra “back office” services, including automatic alarm setup, asset monitoring and reporting, and other dashboard functionalities. Proposals, wealth management tools, compliance services, investment policy declarations, and risk assessments might all be included in the service.

TAMPs typically charge between 0.45% and 2.5% for their services.

These advantages may significantly enhance an investment advice company, but they are not free. Managers must weigh the benefits, which include time savings that allow them to close more deals, against the added expense.

Benefits and Drawbacks of TAMPs TAMPs offer advisors several advantages, including outsourcing tasks like reporting. This allows advisors to free up a lot of time, which they can utilize to acquire new clients or concentrate more on their clients’ investments, ultimately benefiting them.

TAMPs may also be reasonably priced. An adviser may save money by outsourcing to a TAMP instead of setting up similar activities internally, including recruiting more staff members and offering better benefits and other expenses. Ultimately, this may lower their overhead, which they might theoretically pass down to their customers.

Investors must comprehend their fee structure. Verify whether or not you are charged for the costs your adviser pays if they utilize a TAMP. If so, it can work against you and increase the cost of your assets.

An advisor’s authority over the investment plan is diminished when they use a TAMP. Determining if your investing objectives and risk tolerance align with the TAMP investment strategy is critical.

Turnkey Asset Management Programs (TAMPs) FAQs

What are the largest TAMPs?

The major 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 Would You Choose a TAMP?

Selecting the best TAMP for your role as an adviser depends on many criteria. Think about how the TAMP fits into your investment plan, how the TAMP will interact with your custodian, the fees the Turnkey Asset Management Programs (TAMP) charges, whether the TAMP operates on your internal platform, what extra services it offers, how their support management is, and whether it provides additional technology.

Turnkey Asset Management Programs: When Did They Begin?

Programs for turnkey asset management were introduced in the early 1980s.

The Bottom Line Financial institutions may employ turnkey asset management programs (TAMPs) as investment solutions to assist in managing their clients’ investment accounts. Turnkey Asset Management Programs (TAMP) are fee-based services that provide a few services to investment advisers to assist them in improving their offerings. An adviser should evaluate the charges, investment options, and other services offered by a TAMP before selecting one to be sure it is the best choice for both themselves and their customers.

Conclusion

• Fee-based platforms for asset managers, broker-dealers, CPAs, and other financial professionals are known as turnkey asset management products.
• Technology, back-office assistance, and activities like asset allocation and investment research may all be provided by TAMPs.
• TAMP suppliers include Envestnet, SEI, AssetMark, Brinker Capital, and Orion Portfolio Solutions.
• Programs for turnkey asset management may help businesses save time and devote more of their resources to acquiring new business and maintaining their current clientele.
• A turnkey asset management program user who contracts with a third party pays a charge for the service and forfeits some control over the decision-making process.