A turnkey asset management program offers a fee-account technology platform that financial advisers, broker-dealers, insurance companies, banks, law firms, and CPA firms can use to oversee their clients’ investment accounts.

Turnkey asset management programs are designed to help financial professionals save time and allow them to focus on providing clients with service in their areas of expertise, which may not include asset management tasks like investment research and portfolio allocation. In other words, TAMPs let financial professionals and firms delegate asset management and research responsibilities to another party that specializes in those areas.

Turnkey asset management programs are fee-based platforms for asset managers, broker-dealers, CPAs, and other financial professionals.
TAMPs can offer technology, back-office support, and tasks like investment research and asset allocation.
Envestnet, SEI, AssetMark, Brinker Capital, and Orion Portfolio Solutions are examples of TAMP providers.
Turnkey asset management programs can help firms save time and allow them to focus more of their energy on finding new clients and servicing existing ones.
By working with a third party, the user of a turnkey asset management program is giving up some control of some of the decision-making process, while also paying a fee for the service.

Delegating the role of asset manager to a TAMP can help financial professionals and firms to increase profitability by freeing up more time for tasks like attracting new clients and meeting with clients in person. These programs can also save their clients money because developing a proprietary asset management system can be expensive, especially if the company does not already have one in place. TAMPs also handle account administration, billing, and reporting.

Using TAMPs also helps wealth advisers limit 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 providers include Envestnet, SEI, AssetMark Investment Services, Brinker Capital, and Orion Portfolio Solutions.

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.

A mutual fund wrap account is a TAMP that offers many mutual funds with the fees encompassing “wrapping around” all of the investor’s mutual fund trading, rather than having to pay individual fees for each mutual fund, thereby reducing overall fees.

Exchange traded fund (ETF) wrap accounts work in the same manner as mutual fund wrap accounts but investment choices are limited only to ETFs as opposed to mutual funds.

Separately managed accounts (SMA) are geared to high-level investors; those with a significant amount of capital available for investing. SMAs operate similarly to mutual funds except where a mutual fund is owned by pooled investors, a separately managed account is owned only by one investor.

Unified managed accounts hold a variety of different investments that are allocated to their own bucket. One bucket would have stocks, another bonds, and another derivatives, for example. UMAs aggregate the entirety of an investor’s assets but allow them to be managed separately.

As the name implies, a UMH is designed to handle the investments of multiple individuals of one household. This would include parents and children and possibly grandparents if they are in the same household.

TAMPs are available in both off-the-shelf and customized varieties. They are often privately labeled, meaning that it is not apparent to clients that a third party is handling their investments. In addition, these programs serve all types of investors, from mass-market, lower net worth clients to ultra-high-net-worth individuals.

TAMPs provide base technology and additional “back office” support, such as setting up automated alerts, asset tracking and reporting, and other dashboard features. The service might also include supplying proposals, wealth management tools, compliance services, investment policy statements, and might also conduct a risk analysis.

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

These benefits can greatly improve an investment advisory firm, but they come with costs, and managers need to determine whether that additional cost is worth what they get in return, which includes time saved to be able to generate more business.

TAMPs provide a significant advantage to advisors as they allow for the outsourcing of a variety of functions, such as reporting, that frees up a significant amount of time for an advisor that they can use to gain more clients or spend more time focusing on their client’s investments, which benefits the client in the end.

TAMPs can also be cost-effective. By outsourcing functions to a TAMP, an advisor will avoid the cost of having to set up such functions in-house, which can include hiring more employees, providing more benefits, and so on. In the end, this could reduce their overhead; savings that they can technically pass onto their clients.

As an investor, it’s important to understand your fee structure. If your advisor uses a TAMP, check to see if the fees they pay are passed onto you or not. If so, that could be a disadvantage, making your investments more costly.

When an advisor uses a TAMP, the advisor has less control of the investment strategy. It’s important to check if the TAMPs investment strategy mirrors that of your risk tolerance and investment goals.

The largest 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.

Choosing the right TAMP as an advisor is based on a lot of factors. Consider how the TAMP aligns with your investment strategy, the type of relationship the TAMP will have with your custodian, the fees the TAMP charges, if the TAMP works on your internal platform, what additional services does the TAMP provide, what is their support management like, and do they offer additional technology.

Turnkey asset management programs started in the early 1980s.

Turnkey asset management programs (TAMPs) are investment solutions that financial institutions can use to help manage their client’s investment accounts. TAMPs are fee-based services and can provide investment advisors with a handful of services to help them better their services. In choosing a TAMP, an advisor should consider the costs, investment strategies, and other services the TAMP provides to determine whether it is the right solution for them and for their clients.


Leave a Reply

Your email address will not be published.