Americas Best TAMPS 2024 - 19

2024 AMERICA'S BEST TAMPS
The client benefits from better
investment solutions and a long-term,
holistic wealth management approach.
The wealth management firm gains a
standardized and integrated approach
that lowers liability exposure and cost.
The advisor wins because they sit on
the same side of the table as the client,
picking the best managers for their
client's specific situation.
TAMPs are the appropriate business
solution for all types of wealth
managers. Trust companies, for
example, gain access to a level of
investment sophistication not available
with the traditional model of in-house
investment officers.
For broker-dealers, TAMPs speed the
move to managed money solutions
without the extensive money manager
due diligence, all on an easy-to-use,
outsourced, fully integrated platform.
For RIAs, TAMPs allow the advisor to
focus on the asset allocation and risk
management models while removing
performance as a possible point of
contention.
And for the multi-family office, the TAMP
platform allows for the management of
more assets and more sophisticated
investments in an efficient and
professional manner.
Delivery costs will continue to decline
for advisors as TAMP providers scale,
but fee compression on the client side
should be minor. Raw allocation and
portfolio construction costs seem to
have reached equilibrium at around 15
bps, leaving the advisor plenty of room
to support value-added service and
maintain pricing.
The 1% benchmark is far from dead.
But fees will become more transparent,
softening the current bundle into a
fee-for-the-asset allocation and risk
service-a product-related fee from the
third-party manager and service-based
fees for financial planning and trusts,
amongst other aspects.
In the race to communicate clear value,
lower-cost investment vehicles are
already taking over the industry. ETFs
will replace most mutual funds, UMAs
will replace most SMAs, and UMHs will
become the sticky solution for client
retention.
At the core of the business model, firms
select their differentiated strategies and
the TAMP selection process follows.
In the end, the majority of wealth
management firms will be utilizing the
managed money solution, and many
through TAMPs.
This is already the mainstream, the shape
of the industry as it is. Assets on TAMP
platforms will continue to grow. The only
question remains, when will your firm reap
the benefits of an outsourced investment
management provider?
PLATFORM, PRODUCT,
PROCESS
Nearly all TAMP affiliates are passive
consumers, pulling expertise,
technology and systems into their
practice and pushing fee income out.
Which is all right, as far as it goes,
but most of these advisors also have
something to sell: They can push
expertise and systems out. Some even
have in-house technology that makes
their TAMP experience more efficient,
more powerful, or simply allows them to
do things nobody else can.
It's important to know where you fit
into the ecosystem. Very few advisors
care to compete head-to-head with
the existing TAMP platforms. These
are the large-scale digital infrastructure
providers that keep all the numbers
flowing through a unified dashboard,
keeping the client accounts up to date.
TM
Really, these are software companies,
operating on the model of Microsoft,
Salesforce or Adobe. Like them, the
platforms are massive and profoundly
expensive to develop and maintain.
You probably aren't going to build
your own in your garage. Envestnet,
AssetMark, Orion Advisor Services,
SEI, Morningstar-the true platforms
can be counted on one hand. Most are
publicly-traded entities that can support
trillions of dollars of assets.
Think of them as asset management
superstores, effectively gigantic machines
that structure participating advisors'
experiences, shop for investment ideas
to populate client portfolios, and then
facilitate the way those portfolios are
monitored and managed.
You may be a bit smaller. Maybe you're
running a growth-oriented RIA or brokerdealer
that wants to maintain proprietary
strategies as part of your competitive
proposition, and discover that those
strategies have wider appeal than your
in-house capacity can support. Maybe
you're just a gifted stock picker with no
interest in retail clients.
The ideas themselves are the most
visible form of the products that other
TAMP providers support. A company
within the TAMP universe no longer
needs its own platform. It can simply
feed expertise and proprietary tools
that can either stand alone in their own
technology architecture, or integrate
with one, some, or all primary platforms.
If you've invested the resources into
dynamite small-cap research, for
example, that's a product you can offer
other advisors who specialize in other
areas of the market or are abandoning
the portfolio entirely. Others may have
developed proprietary ways to handle
alternative assets, integrate hedge funds
into retail accounts, or focus on one or
more foreign markets. Whatever your
investment edge, that's your product.
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Americas Best TAMPS 2024

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