Turnkey Asset Management Program (TAMP): Definition and Types

What Is a Turnkey Asset Management Program (TAMP)?

A turnkey asset management program is a fee-account technology platform that allows financial professionals to oversee their clients’ investment accounts.

TAMPs help financial professionals save time and focus on providing expertise to clients rather than asset management tasks. They delegate asset management and research responsibilities to specialized parties.

Key Takeaways

• TAMPs are fee-based platforms for asset managers and financial professionals.
• TAMPs offer technology, back-office support, investment research, and asset allocation.
• Examples of TAMP providers include Envestnet, SEI, AssetMark, Brinker Capital, and Orion Portfolio Solutions.
• TAMPs allow firms to save time and focus on client acquisition and servicing.
• Using a TAMP involves giving up some control and paying a fee for the service.

Understanding Turnkey Asset Management Programs (TAMPs)

Delegating asset management to a TAMP helps financial professionals increase profitability and save money by avoiding the cost of developing proprietary systems. TAMPs also handle account administration, billing, and reporting.

TAMPs limit the risk of being sued for poor investment performance by outsourcing investment selection and management. Major TAMP providers include Envestnet, SEI, AssetMark Investment Services, Brinker Capital, and Orion Portfolio Solutions.

Types of Turnkey Asset Management Programs (TAMPs)

There are five types of TAMPs, namely mutual fund wraps, exchange traded fund wraps, separately managed accounts (SMAs), unified managed accounts (UMAs), and unified managed households (UMH).

1. Mutual Fund Wrap Accounts

Mutual fund wrap accounts offer multiple mutual funds with fees encompassing all of the investor’s mutual fund trading, reducing overall fees.

2. Exchange Traded Fund Wrap Accounts

Exchange traded fund wrap accounts work similarly to mutual fund wrap accounts but limit investment choices to ETFs.

3. Separately Managed Accounts (SMAs)

SMAs are for high-level investors and are owned by one investor, unlike mutual funds.

4. Unified Managed Accounts (UMAs)

UMAs hold various investments in separate buckets, allowing for separate management.

5. Unified Managed Household (UMH)

UMHs manage investments for multiple individuals within one household.

Special Considerations

TAMPs come in off-the-shelf and customized varieties and cater to all types of investors. They provide technology, back-office support, proposals, wealth management tools, compliance services, and risk analysis.

TAMPs typically charge between 0.45% and 2.5% for their services.

While TAMPs offer several benefits, they come with costs. Managers must assess whether these costs outweigh the advantages, including time saved.

Advantages and Disadvantages of TAMPs

TAMPs offer advisors the advantage of outsourcing various functions, freeing up time to attract clients and focus on investments.

TAMPs can be cost-effective compared to setting up functions in-house. However, fees passed onto clients may increase costs.

Using a TAMP reduces control over investment strategy, requiring alignment with risk tolerance and investment goals.

Turnkey Asset Management Programs (TAMPs) FAQs

What Are the Largest TAMPs?

The largest TAMPs include Mount Yale Capital Group, Adhesion Wealth, Matson Money, Sawtooth Solutions, Orion Portfolio, Brinker Capital, Buckingham Strategic Partners, AssetMark, Independent Advisor Solution by SEI, and Envestnet.

How Do You Pick A TAMP?

Choosing the right TAMP involves considering investment strategy alignment, custodian relationship, fees, internal platform compatibility, additional services, support management, and available technology.

When Did Turnkey Asset Management Programs Start?

Turnkey asset management programs started in the early 1980s.

The Bottom Line

TAMPs are fee-based investment solutions that help financial institutions manage client investment accounts. Advisors should assess costs, investment strategies, and services provided by TAMPs to determine suitability for themselves and their clients.