Americas Best TAMPS 2024 - 12

2024 AMERICA'S BEST TAMPS
growing like an ambitious RIA by signing
clients and rolling up AUM. Or maybe
you were a pure technology provider,
selling software and subscriptions to
anyone who can put that code to work.
Maybe your customers are advisors,
maybe they're banks, maybe they're all
over the enterprise map.
Solutions with an integrated financial
focus offer a strategic edge in today's
marketplace. In 2021 alone, investors
pushed a record $39 billion at startups
automating everything from nickel-anddime
cash transfers to all the intricacies
of running an elite family office.
And on the financial side, adding a
slice of tech to your profile gives you
an essential edge. A little nomenclature
makes a huge difference when it comes
to the enterprise value of your business.
An advisory firm is probably worth 2.5
times revenue, factoring up or down
depending on the proportion of that
recurring or transactional fee income.
Even still, the math revolves
around maintaining individual client
relationships. Automate even part of
the relationship management, and
suddenly, you're in fintech land where
companies get bought out for 3.5 to 6.5
times revenue. Same cash coming in,
double or even triple the exit.
Everyone who's worked with
entrepreneurs can see how much
wealth a better exit creates. And in the
meantime, a stronger platform means
you grow faster, expand your reach, and
do so much more than simply survive
the onslaught of other people's robots.
Don't fight the robots. Put them to work
on your behalf. Develop better robots of
your own, and give other advisors a way
to leverage your unique expertise-while
paying you for the privilege.
LIBERATED TO DO
WHAT YOU DO BEST
If you're uniquely talented at a particular
task, keep doing it. But if it's not
essential, it's time to unbundle that task
from your core competitive proposition.
The investment portfolio itself was once
the heart of the advisory relationship.
Nobody else could do it, so this was
how a professional demonstrated their
expertise and justified ongoing care-
translating that attention into recurring
fees.
Now it's clear: Robot systems can do
a fairly good job at a fraction of the
cost. Beating the robots could take a
staggering amount of resources-a cost
center most sustainably divided among
multiple frontline advisors.
In effect, portfolio management slides
toward the back office where functions
are easily commoditized and unbundled
from what you do all day. Every TAMP
shunts the investment management
function to world-class asset managers.
Since these platforms are more
sophisticated than any pure robot
system on the market today, wealthy
investors still recognize the value.
They'll appreciate your expanded
capacity to anticipate their needs
and focus on their concerns, while
maintaining ultimate authority over
selecting the right asset managers and
products for their portfolio.
That's not a recipe for professional
extinction, or even a race to the bottom
for fees. This is how forward-looking
advisors are getting ahead of the future,
by focusing on those aspects of the
business that any client truly values:
personal attention, insight into unique
situations, service and trust.
TM
No robot can do that. But with a robot
on your side, you can do that and more.
We've arrived at the future.
TAMP BUILDING BLOCKS
The underlying outsourced portfolio
solution investment model that drives
modern TAMPs can be classified into
five fundamental varieties depending on
the type of investments offered, the firm's
responsibilities, and the added capabilities
of overlay-not to mention cost.
1. Mutual Fund Wrap Accounts
Also known as a Mutual Fund Advisor
Program, a mutual fund wrap account
provides multiple mutual funds, selected
from a large pool based on asset
allocation guidelines. The investment
advisor manages the funds as a
single account, for a single annual fee
of 85 to 150 basis points. That fee
" wraps around " all the client's mutual
fund activity, providing transparency,
simplicity and an alternative pricing
option opposed to paying an upfront
commission or surrender charge.
2. ETF Wraps
An ETF wrap is a type of managed
account where the client's investment
portfolio is invested solely in exchangetraded
funds. The selection and
composition of each ETF class is based
on the appropriate asset allocation
model and periodically assessed to
respond to market changes. As with
most managed accounts, there's an
asset-based fee for the account, so
the advisor pays transaction costs.
ETF wraps often have lower expense
ratios than mutual fund wraps and offer
intraday trading, tax efficiency, and
other benefits.
3. Separately Managed Accounts
An SMA is made up of a portfolio of
individual securities, managed by a
single asset manager in a particular
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Americas Best TAMPS 2024

Table of Contents for the Digital Edition of Americas Best TAMPS 2024
