As more financial advisors consider moving to a flat fee-based business model, they may want to outsource their back-end administrative and investment management functions to a turnkey asset management program or TAMP.
TAMPs can be offered as stand-alone products or as a platform in which financial advisors can direct clients’ retirement savings to different investment models for a fee. Fees are typically low because they are spread across all of the assets managed.
Clients want to have more interaction with their financial advisor. They want to be able to pick up the phone and call them whenever they have a question. But, if those advisors are doing everything themselves, including meeting with clients, managing their money, conducting research on mutual funds and asset management, they might not have time to give clients the attention they deserve, he said.
Good TAMPs provide back-end reporting, administrative and accounting services along with their investment management options, Sumnicht said.
One big benefit to working with a TAMP is that individual financial advisors don’t have to buy a platform or build one from scratch. And, although it can still be time-consuming managing the data that gets entered into the TAMP’s database, it is still a lot easier than starting from scratch, Sumnicht said. Platforms also allow clients to get into their accounts electronically and see what they are doing on a daily basis.
These systems also print out quarterly reports. Sumnicht says his team spends a lot of time merging TAMP client reports with other client assets so individuals can get a more robust picture of how they are doing financially.