How to Choose a Turnkey Asset Management Platform (TAMP)

If you’re a financial advisor, you may be overwhelmed by the wide range of responsibilities in running your business. Along with advising clients, you must also oversee their asset management, regulatory compliance, and administrative tasks.

The good news? You don’t need to complete all of this work in-house. Outsourcing your asset management to a Turnkey Asset Management Platform (TAMP) can streamline your workload and allow you to allocate more time to cultivating strong client relationships.

If you’re interested in implementing a TAMP, you may wonder how to choose the best one for your business. In this article, we’ll briefly explain the definition and benefits of TAMPs. After that, we’ll outline six steps for choosing the right TAMP for your practice.

What is a Turnkey Asset Management Platform?

A TAMP is a technology platform that helps financial advisors handle various aspects of their asset management and administration. While every TAMP’s offerings vary slightly, they typically share a few core functions. These functions include:

• Asset management – The primary function of a TAMP is to manage your clients’ portfolios. You can customize your investment strategies to suit your clients’ financial goals, risk performance, and investment timelines. After designing your portfolios, your TAMP will execute trades and rebalance portfolios on your behalf to maintain your clients’ target allocations.
• Compliance and regulatory support – Many TAMPs can assist with regulatory compliance by maintaining detailed transaction records and sharing periodic performance reports with your clients. They can also securely store your clients’ data and submit your regulatory reports on time.
• Administrative support—Most TAMPs include some back-office support, such as preparing documents, generating invoices, processing payments, or managing client accounts.

When you outsource these tasks to a TAMP, you can free up a substantial amount of time to focus on more revenue-generating activities. In fact, research shows that advisors who outsource their asset management save an average of nine hours per week.

Beyond these basic capabilities, some TAMPs may also provide additional features and specialized services that can enhance your practice, such as client portals, tax harvesting tools, marketing automation, or educational resources.

Benefits of Using a TAMP: By The Numbers

TAMPs offer many benefits, from saving time to connecting you with a broader array of investment strategies. They can also help you leverage economies to scale to lower costs and improve portfolio outcomes.

As TAMPs have grown in popularity, many surveys and studies have proven their substantial advantages. Just take a look at these statistics about financial advisors who outsource their asset management:

• 97% are satisfied with their decision to outsource.
• 95% report enjoying a better work-life balance.
• 83% develop stronger client relationships.
• 82% report an increase in client retention.
• 75% spend more time with their clients.
• 74% acquire more new clients.

Learn More: Want to discover even more benefits of employing a TAMP as a financial advisor? Check out our article, “What is a TAMP and Should You Use One?”

6 Steps For Choosing The Right Turnkey Asset Management Platform

While most TAMPs boast impressive benefits, not all platforms are built the same. TAMP solutions can vary significantly in terms of investment philosophies, service offerings, fee structures, and transition support.

With that in mind, let’s dive into the six steps for selecting the best TAMP for your financial advisory firm:

Step #1: Define Your Business Goals

The first step to choosing any new business solution is defining your goals. You can do so by answering the following questions:

• What is your primary motivation for investing in a TAMP?
• Do you want to spend more time with clients and improve their satisfaction?
• Do you want to focus on providing more personalized financial planning?
• Do you want to streamline your administration and operational efficiency?
• Do you want to concentrate on business growth initiatives?
• Do you want to achieve a better work-life balance?

Outsourcing your asset management can help you achieve all these goals, but some TAMPs may help you meet specific goals faster than others. For example, if you want to enhance client satisfaction, you may seek a TAMP offering comprehensive client reporting features and convenient client portals. Meanwhile, if personalized financial planning is your aim, customized features and advanced analytics may be your top priorities instead.

Step #2: Review Your Investment Philosophy

Next, it’s time to clarify your investment philosophy. Do you take an income-driven, value-driven, or growth-focused approach to investing? Do you prefer passive or active asset management? Do your clients value socially responsible or ESG (Environmental, Social, and Governance) investing?

Understanding the core tenets of your investment philosophy can help you choose a TAMP that aligns with your approach and supports your strategic goals.

Step #3: Determine Your Preferred Features and Services

TAMP providers differentiate themselves by offering additional support services and advanced features. Depending on your goals and budget, you may or may not want to take advantage of these specialized offerings.

Here are 15 extra features and services to consider when evaluating various TAMPs:

1. Flexible investment strategies – If you want to customize your clients’ asset allocations to their individual needs and goals, you need a TAMP that offers a diverse array of investment strategies, including mutual funds, exchange-traded funds (ETFs), equities, bonds, fixed income solutions, and separately managed accounts (SMAs).
2. Customizable portfolio management – While pre-built, model-based portfolios can offer outstanding convenience and efficiency, you may still want to customize some client portfolios. If so, look for a TAMP with portfolio construction tools that can help you easily craft custom portfolios.
3. Tax-harvesting tools – Tax harvesting is a complex process, so it’s typically only offered by TAMPs with more sophisticated algorithms and tax capabilities. These tools can optimize your clients’ tax outcomes by strategically realizing gains and losses to minimize tax liability over time.
4. Held-away account management – Do a sizable portion of your clients have 401(k)s within their employer’s retirement plans? If so, you may want to select a TAMP that allows you to manage these held-away accounts and bill for your services.
5. Account opening support—Opening new client accounts can be tedious. Fortunately, TAMPs that feature customer relationship management (CRM) and e-signature software integrations can streamline the process, reducing the time and complexity involved in onboarding new clients.
6. Document management – Maintaining accurate, up-to-date documents is crucial for your regulatory compliance and administrative organization. Luckily, some TAMPs include document management systems so you can securely upload, store, and manage your clients’ documents from one centralized location.
7. Accounting support – Billing, accounting, and reconciliation require meticulous attention to detail. As your business grows, you may need to hire additional staff if you manage these functions in-house. By outsourcing to a TAMP with accounting features, you can ensure these tasks are completed properly without adding to your in-house workload.
8. Custodian integrations—TAMPs that integrate with custody and clearing providers offer significant operational advantages. These integrations enable seamless movement of assets between accounts, simplifying the process of rebalancing portfolios, executing trades, and transferring funds. Custodian integrations can also enhance client reporting by ensuring that account data is updated in real-time.
9. Client portals – Most clients appreciate having 24/7 access to their account information. TAMPs with built-in client portals allow clients to view their investment holdings, transactions, and performance reports conveniently. Portals also offer a secure platform for you and your clients to communicate about financially sensitive information.
10. Performance analysis – Some TAMPs include helpful analyzer tools that can compare clients’ holdings to a specific benchmark, advisor model, SMA, or customized strategy, giving you and your clients quick performance insights at a glance.
11. Branding customization—Outsourcing your asset management to a third-party TAMP doesn’t mean you have to dilute your brand identity. Simply look for a TAMP that allows you to customize your client portal with your own branding, logo, and color scheme. This branding consistency can enhance your clients’ user experience.
12. Business growth support – Some TAMP providers offer valuable services to help you grow your business, such as marketing support, business development tools, and ongoing referrals. If expanding your business is a top priority, partnering with one of these TAMPs can expedite your progress.
13. Risk management support – When your client portfolios are at risk, you want to know as soon as possible. TAMPs with robust risk management tools can help you pinpoint potential warning signs so you can promptly address them.
14. Succession planning – Many financial advisors employ TAMPs to strengthen their succession planning. After all, TAMPs can help your successor ensure operational continuity and stability after the sale or transfer. Some TAMP providers specialize in succession planning, so they can help prepare your business for a smooth transition.
15. Dedicated services teams—The quality of TAMPs’ service teams can vary significantly. Some TAMPs have seasoned investment, compliance, and tax experts readily available to assist you, while others may offer more limited support, leaving you to navigate complex issues independently. As you can see, the additional support services you can choose from are vast. After determining the most important services, you can look for a TAMP provider that offers your preferred suite of solutions.

Step #4: Review Your TAMP Fees and Budget

A TAMP equipped with all the bells and whistles may catch your eye, but does it fit your budget? The best way to find out is to ask your top TAMP providers about their fees.

Most TAMPs structure their fees as a percentage of your total AUM, ranging from 0.85% to 2.80%. After gathering information about your TAMP providers’ fees, you can crunch the numbers to determine which one offers the best overall value for your needs and goals.

Step #5: Inquire About Your TAMP Provider’s Ideal Clients

Just as you have a preferred type of client you enjoy working with – whether that’s young professionals, retirees, or high-net-worth individuals – every TAMP provider also has its own ideal client profile. TAMP providers typically design their offerings to suit the needs and preferences of their target clientele.

Asking your TAMP provider what type of advisors they typically work with can help you determine whether you’re a good fit for their platform.

Step #6: Ask About Their Transition Process

While TAMPs have the potential to transform your operational efficiency, business growth, and customer satisfaction, you may have some concerns about the implementation phase. For example, you may be asking yourself:

• Will adopting a TAMP disrupt my daily operations?
• Will my employees be able to adapt to the new technology quickly?
• How long will the training process take?
• What if I can’t resolve troubleshooting issues on my own?

These concerns are quite common. Nearly half of business leaders reveal that their top challenge to digital transformation is their employees’ resistance to change. Meanwhile, 57% of employees feel insecure about their own digital proficiency.

You can overcome these hurdles by choosing a TAMP provider that can guide you and your employees through the transition, provide adequate training, and offer ongoing support post-transition.

Choose Your Turnkey Asset Management Platform With Confidence

The right turnkey asset management platform can propel your financial advisory practice to new heights. By following the six steps outlined above, you can select a TAMP that aligns with your needs, goals, and budget.

Are you looking for a flexible TAMP solution with full-service features and a bespoke level of service? If so, Alden Investment Group’s TAMP solution, Alden COVE, may be the ideal fit. Alden COVE stands out for its:

• Flexible asset management options
• Access to over 500+ institutional strategies
• Held-away account management tools
• Compatibility with multiple custodians
• Comprehensive compliance support
• Account opening and back-office assistance
• Personalized branding
• Robust risk management tools
• Convenient client portal with custom branding
• Ongoing transition support

Alden COVE also features several powerful integrations with other best-in-class service providers, including Amplify, Black Diamond, Pontera, and Redtail. These integrations make implementing Alden COVE a breeze.

When you’re ready to get started, our team can prefill your custodial and firm documents and manage your account opening process. Our transition support doesn’t stop there – once Alden COVE is up and running, we’ll provide ongoing resources, including training sessions and business consulting, so you have everything you need to enjoy a seamless transition and sustained success in your new chapter.

By joining Alden Investment Group, you’ll also enjoy support from our seasoned investment team. We can assist with your model/UMA creation, marketing, succession planning, workflow optimization, and regulatory compliance.

Interested in joining Alden and leveraging Alden COVE? Contact our team today to learn more.

Sources:

Investment News. How to choose a turnkey asset management platform.
https://www.investmentnews.com/goria/tamps/how-to-choose-a-turnkey-asset-management-platform/253641#:~:text=And%20here%27s%20the%20clincher%3A%20%E2%80%9Cresearch,business%20performance%2C%E2%80%9D%20says%20Matrisian.

Plan Advisor. Advisers Increasingly Turn to Third-Party Asset Managers.
https://www.planadviser.com/advisers-increasingly-turn-third-party-asset-managers/

Investment News. RIAs leverage TAMP tech the most: Report.
https://www.investmentnews.com/fintech/rias-leverage-tamp-tech-the-most-report/202508

PR Newswire. Workforce Resistance to Change Emerges as Top Challenge for Successful Digital Transformation.
https://www.prnewswire.com/apac/news-releases/workforce-resistance-to-change-emerges-as-top-challenge-for-successful-digital-transformation-301838163.html#:~:text=In%20addition%20to%20the%20lack,employees%20have%20about%20digital%20transformation.