A TAMP, also known as a turnkey asset management platform, is an application that makes it easier for investment managers to handle clients’ assets and investment portfolios.
While TAMPs got their start in the 1980s, the technology is ever more sophisticated today. The TAMP market has grown significantly, and said platforms now hold more than $2 trillion in managed wealth.
With the technology more accessible (and necessary) than ever, investment advisory firms should consider getting a TAMP or move to a more modern and better version, like the TAMP1 platform.
There are two types of TAMPs:
A product TAMP is focused on proprietary investment strategies and research, whereas a platform TAMP focuses on technology to access third-party strategists.
When considering investment advisor technology, keep these two types in mind.
When you hear something is 'turnkey', just think "it's ready for use right now.
It's like a car. To start it, all you have to do is turn the key in the ignition, and off you go. You don't have to worry about assembling the car; the car is already built. A simple turning of the key puts you on your way.
Ironically, starting a newer car today is even more turnkey than turning a key; it's literally pressing a button!
And that's what TAMPs are like. It's literally pressing a few buttons, and you have what you need.
What makes a TAMP turnkey are the things you and your team don't have to do anymore.
The TAMP software and service provider would handle the tasks, giving you more free time to focus on revenue-generating activities.
Depending on the type of TAMP, there are various functions and features that come turnkey:
It's simply a matter of logging in to the platform and seeing everything you're looking for. You don't have to worry about being the one to upload the custodian data and populate it into the various fields.
Note: Though product and platform TAMPs differ, there are also differences within product and platform versions, respectively.
Not every TAMP will necessarily have all above features listed, nor will every TAMP excel in all of those features if they did. That is why it’s important to evaluate TAMP offerings carefully to find the right solution for your organization.
Most TAMPs charge on basis points, or a percentage of your total assets under management. This is a common pricing model in the industry.
This pricing model, however, is not a good indicator of what’s being done for you.
When the markets go up, the value of assets increase and therefore you pay more, despite the workload staying the same.
On the reverse, when markets go down and assets shrink in value, you pay less. While that sounds fair to pay less, the problem is what happens in a prolonged downturn? Your service provider is making less money, and in extended periods of revenue losses, how will that affect the provider's ability to serve you? Less revenue leads to budget cuts, and with that a potential decrease in the quality and availability of service.
TAMP1 is different. Pricing is determined after an in-depth analysis of the client’s procedures and requirements. TAMP1’s fees are fixed for the duration of a contract, hence no fluctuation in pricing. After all, the point is to meet your needs. You shouldn’t pay for things you don’t need, nor should you be “penalized” with higher fees when the markets are up.
Some TAMP providers offer 1-year or longer-term contracts. You might pay a lower rate on longer terms, but if you have to break the contract, you may be penalized for exiting early.
How much flexibility do you need? If you want more flexibility, opt for the typical 1 year agreement. If you have more certainty in the platform you’ll use, take a longer term contract and the cost savings that go with it.
Many TAMPs bundle services in their pricing quotes. This means you’ll end up paying for products that are not needed to upgrade with other functionalities and capabilities.
Because of TAMP1’s a la carte approach, pricing is based on your specific requirements, you’ll pay only for the services you want and need. There are no bundles to stick you with unneeded features.
Some TAMPs sell just software, and then leave it to you to figure out the rest. If you want further help from the provider, they’ll either charge extra, or you'll wait in a long queue to be serviced.
TAMP1 is software and services, bundled into one. Pricing includes the platform and a team of experienced portfolio accounting specialists. Human support is available for the timeframes you need it.
Empaxis’ turnkey asset management platform, TAMP1, has its share of specialties and thus has its focus of offerings, shown below.
The TAMP1 platform offers you:
The investment industry is often behind the times with technology adoption. TAMP1 is designed for investment managers in a modern structure that allows you to grow and scale your business for the long term.
One of the obstacles in moving to a new platform is data migration. TAMP1 has removed that friction by making its platform flexible and compatible with older and existing systems and their data sets. The migration time and effort is cut substantially with TAMP1.
Your future depends on modern, versatile fintech. TAMP1 is just that, providing a managed solution for a digital warehouse, portfolio accounting, client-advisor portal, CRM and performance reporting.
By handling the data and reporting, TAMP1 gives you that free time to focus on what you do best.
On a more general note, the most powerful benefit advisors gain from outsourcing (or using a TAMP) is additional capacity, according to a study by AssetMark.
According to the study, 98% of advisors who outsource say they are now able to deliver better investment solutions to clients. And the more that they outsourced, the more time they gained back. Advisors that outsourced 20%-49% of their assets gained 5.8 hours back per week; those who outsourced 50%-89% gained 7.7 hours; 90%-100%, 8.4 hours.
TAMPs are the future – and, increasingly, the present. Investment firms that keep their data on locally stored servers and not on cloud-based advisor tech platforms run the risk of falling behind their competitors.
Find out about transitioning to turnkey asset management platforms in our eBook, "Technology Guide for Small to Midsize Investment Firms: Choosing a TAMP."
Or you can chat with us! Get a free consultation.