One of the greatest values an investment advisor can give a client is time. It’s also one of the most difficult things to give, because of the other demands of the business. That’s where a turnkey asset management platform, or TAMP, comes in.
A recent Kitces survey revealed that about 50% of a typical investment advisor’s time is actually spent on client-related activities. Overall, however, a typical advisor spends less than 20% of their time actually meeting with clients.
One of the best ways an advisor can spend more time with clients is by outsourcing various tasks to third-party vendors or by leveraging the power of a TAMP. These fee-account technology platforms let financial advisers oversee their clients’ investment accounts.
Tiburon Strategic Advisors projected that by 2019, TAMPs would serve 4.5 million clients and $3.9 trillion in assets under management and administration, a three-fold increase since 2014.
The growth in TAMPs is a clear sign of the value they bring, and they are a modern solution to an age-old problem: not having enough time. Here are some other reasons why you need a TAMP and what one should give you.
Many investment managers – 46% – report being dissatisfied with their current software, according to Wealth Briefing. Here are some of the common complaints:
As a workaround, some firms will build and maintain their own platforms in-house, but even that has its drawbacks:
One substantial benefit to working with a cloud-based TAMP is that investment advisors don’t have to build the platform from scratch. The client and advisor portal of a TAMP makes it possible for both parties to monitor accounts and investment portfolios, whenever and wherever.
There are many reasons to move to a TAMP. Some of the most common are:
Many TAMPs also offer financial planning and risk profiling, investment net and reporting solutions and many value-added tools to complement their investment services.
For more reasons to move to a TAMP, download our eBook, “Technology Guide for Small to Midsize Investment Firms: Choosing a TAMP.”
When you’re evaluating a TAMP, there are a few points to consider:
There are some standard pricing models for TAMPs, which offer some standard features. Empaxis’ TAMP1, however, offers pricing and feature flexibility that will fit your needs. Find out more about TAMP1 features vs. competitors.
Most TAMPs charge based 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.
TAMP1 is different. Pricing is based on volume and complexity, and the 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 as a result of market activity. After all, the point is to meet your needs. You shouldn’t pay for services 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 charge again for labor.
TAMP1 pricing is based on what you need; it includes the platform and a team of experienced portfolio accounting specialists. Human support is available for the timeframes you need it.
TAMPs offer advisors a complete investment management program. It facilitates investment selection and management, allowing the wealth advisor to take tasks off their plate such as investment research, manager due diligence, performance reporting, portfolio construction, rebalancing, reconciliation, statement preparation and tax optimization. Advisors then can focus more on gathering assets, acquiring new clients and servicing existing accounts.
TAMPs can offer clients:
Note: Different TAMPs have different specialties. 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.
Empaxis’ turnkey asset management platform, TAMP1, has its share of specialties and thus has its focus of offerings. The TAMP1 platform offers you:
The investment industry is behind the times with technology adoption. TAMP1 is designed for investment managers in a modern structure that allows you to grow your business.
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.
The most powerful benefit advisors gain from outsourcing is additional capacity, according to a study by Assetmark. Time that had been spent on investment management can now be used to build relationships with clients – listening to their concerns, overcoming issues and mapping out their future needs – or seek out new business opportunities.
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 outsourcing 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.” Sign up today for a free consultation.