Americas Best TAMPS 2024 - 15

2024 AMERICA'S BEST TAMPS
A TAMP or other outsourced portfolio
solution allows financial professionals to
easily manage even complex account
structures (like UMAs and UMHs) and
serve high-net-worth and ultra-highnet-worth
clients with better investment
capabilities.
At the same time, a true TAMP allows
wealth advisors to serve the mass
market and mass affluent investor
efficiently through accounts like mutual
fund wraps and ETF wraps. Individual
advisors can offer the same level of
services to clients as a wirehouse
provides, thanks to lower startup costs.
Outsourcing reduces or removes the
need for in-house support personnel
and IT infrastructure.
Because a TAMP is by definition
self-contained, both provider and
operational risk is reduced. Active and
passive investments can be combined
across the spectrum from conservative
to aggressive.
Any outsourced solution will consider
the length of time assets are to be held,
the expected tax rate over that period,
and the type of investment. Advisors are
able to mix and match mutual funds,
ETFs, SMAs and other products on
vetted platforms, starting with preset
allocation models and then customizing
for each individual client.
The details around the deployment of
your TAMP will vary. Several factors are
in play:
* Legal structure (RIA, broker/dealer, etc.)
* Competitive differentiators
* Existing capabilities (compliance,
reporting technology, workflow tools,
CRM, etc.)
TAMPs may support or enable
many functions depending on their
competitive offerings. When a firm
contracts with a TAMP, it usually
receives at a minimum:
* A " white label " solution reflecting the
look and feel the wealth manager
desires
* The technology platform to manage
and execute client investments, often
with appropriate dashboards, alerts
and compliance
* A menu of approved asset managers
for different types of accounts and
asset classes
* Links to appropriate trading networks
as required
* Custody reconciliation
Other considerations include manager
and product selection, levels of fees
to the clients, and the ability to fee on
held-away assets, costs of the platform,
aggregation capabilities, and ancillary
support like financial planning. Processes
like proposal generation and reporting
can also be key determining factors.
The top outsourced portfolio solutions
offer:
* Streamlined asset allocation and
trading functionalities
* Scalability to provide openended
growth opportunities and
comprehensive data delivery for all
parties
Once a TAMP is in place, the advisor
can easily track every client's goals
against their portfolios-not just look
at broad industry benchmarks. The
enhanced reporting allows advisors
and their clients to adjust plans
they progress toward life goals or
philanthropic work. Advisors have
access to a group of investment
programs and professionals vetted
by the outsourced portfolio solution
provider in areas of asset allocation and
products in a variety of other model
portfolios.
TM
What does all this mean for advisors?
Instead of constantly handling
administrative and back-office tasks,
they're finally able to focus on the client,
managing assets in an optimal way
while reinvesting limited resources in
client interactions.
While the advisor can elect to supervise
non-core tasks, most are eager to
refocus their attention on tasks only
they can pursue: gathering assets and
building client relationships.
A NOTE ON AGGREGATION
Clients routinely find it difficult to
settle on a single trusted advisor.
Citing perceived expertise in different
investment areas and personal biases,
clients typically employ multiple
advisors. It's impossible for the advisor
to offer effective asset allocation without
a holistic financial picture of the client.
Aggregation tools allow for that holistic,
client-centric advice and the ability
to manage client risk. Only a small
percentage of wealth managers are
making aggregation of their clients'
assets a priority.
The rationale is clear: Aggregation better
aligns services and outcomes for clients
and advisors, and paves the way for
mutual long-term relationships.
Many financial advisors are missing
the opportunity to fee on assets held
outside the core relationship. Experience
demonstrates that if the advisors do a
good job explaining how their oversight
improves the risk and return profile of
entire client or household portfolios,
clients do not balk at a modest fee of 3
to 5 bps on held-away assets.
Product value should be passed along
to clients when partnering with a TAMP.
Investments must cater to the client
base of an advisor's firm. For example,
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Americas Best TAMPS 2024

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