AssetMark | Blog

Turnkey Asset Management Platforms: How to Get Started

Written by AssetMark | Jul 14, 2023 4:00:00 AM

You’ve done your research, talked with other financial advisors, and found a TAMP that provides the services and support that you, your firm, and your clients want. What’s next? How do you get started? What should you expect in the onboarding process?

In this article, we’ll go over how you can get started, what you can expect moving forward, and tips to get the most out of your TAMP.

As a reminder, a turnkey asset management platform is a one-stop-shop solution for advisors that want to outsource investment management and focus on client relationships, business development, and growth opportunities.

If you’re unclear on how TAMPs help other financial advisors, check out this article: What Is a TAMP and How to Choose the Right One?, then rejoin us here.

3 Steps to Get Started With a TAMP

Getting started with a TAMP can be a straightforward process. Here are common steps in the process as you shift toward third-party investment management. Along the way, we’ll highlight when the financial advisor, RIA, or the TAMP will be taking each step.

  1. The broker-dealer or RIA entity enters into a selling agreement with the TAMP. AssetMark already has standing agreements with many broker-dealers, like LPL Financial, Advisors Group, JW Cole, Cambridge, Cetera and the list continues to grow. Check with your consultant whether there is a selling agreement already. If there is, then you can skip this step.
  2. The financial advisor signs up with the TAMP and gets immediate access to its suite of investment management tools and services, including a range of investment options: mutual funds, ETFs, and separately managed accounts (SMAs).

    The TAMP's onboarding team also provides support and coaching for the financial advisor and their staff to facilitate a smooth transition.
  3. The financial advisor and TAMP together begin portfolio construction at the level of support that the financial advisor likes best.
    • Generally, the financial advisor provides necessary documentation and information, like client investment objectives, risk tolerances, and account transfer forms, ensuring that the TAMP has access to relevant client records and any required authorizations.
    • The TAMP works with the advisor to create customized investment portfolios and proposals for their clients based on the clients' investment goals, risk tolerance, and other factors.
    • The TAMP then takes care of the administrative and operational tasks associated with managing client portfolios, such as account opening and maintenance, trading, and rebalancing.

The TAMP may also provide additional services like client-facing presentation decks, marketing materials, or investment performance reporting.

There’s not one right way to start outsourcing. Some financial advisors select certain accounts that can benefit most from the expanded product offerings, others go all-in at once, and others start with their own personal accounts as they learn the ropes.

Set Yourself Up for Success During Onboarding

A good platform won’t be hard to use, but you should still expect some onboarding time. The TAMP provider should help you with the implementation process, which may include transferring assets, setting up client accounts, and accessing the platform's tools and resources.

You can use these onboarding tips to position yourself for success.

  1. Clearly communicate client goals and investment preferences.
    No one knows your clients better than you. It's crucial to communicate clearly with the TAMP so you can customize your clients’ portfolios accordingly.
  2. Leverage the TAMP’s training for yourself and your staff.
    Onboarding with a TAMP may require some operational changes, such as updating client accounts and software systems. Leverage the onboarding team to train your staff on the new systems and processes to ensure a smooth transition and minimize any disruptions in client service.
  3. Ask for more!
    Connect with a consultant for an assessment to determine which services best suit your practice. An expert can help you optimize the implementation process, offer insights on technology integrations, support process development, and help you establish performance tracking to ensure you get the most out of your TAMP solution. Not to mention, practice management, retirement services, charitable giving, HNW/UHNW offerings, etc.

How Does a TAMP Work? 

Here's a brief overview of how financial advisors typically work with TAMPs:

  1. Investment Strategy Alignment
    • Collaborate with the TAMP's investment team to align investment strategies with your clients' goals and risk profiles.
    • Discuss any specific investment preferences or restrictions that should be taken into account.
    • Review and agree upon asset allocation, investment vehicles, and performance benchmarks.
  2. Account Setup and Transfer
    • Work with the TAMP to establish client accounts within their system.
    • Facilitate the transfer of client assets to the TAMP, ensuring compliance with regulatory and custodial requirements.
    • Coordinate with custodians or transfer agents to facilitate the smooth transfer of assets.
  3. Ongoing Portfolio Management
    • Monitor and review client portfolios regularly in collaboration with the TAMP's investment team.
    • Utilize the TAMP's technology platform and reporting tools to track portfolio performance, risk metrics, and compliance guidelines.
    • Communicate with the TAMP's support team for any required adjustments, rebalancing, or changes in investment strategies.
  4. Client Communication and Reporting
    • Maintain regular communication with clients, providing updates on portfolio performance, investment strategy adjustments, and market insights.
    • Leverage the TAMP's reporting capabilities to generate client reports, including performance summaries, asset allocation breakdowns, and transaction details.
    • Address client inquiries and provide support through the TAMP's client service channels.
  5. Billing
    • The TAMP may add to the advisory fee a layer for using the TAMP tools to help manage the account. TAMPs may charge advisors a fee for access to its tools and services, which may be based on a percentage of assets under management or a fixed fee.

Throughout the engagement, financial advisors collaborate closely with the TAMP to deliver professional investment management services, ensure compliance, and provide exceptional client experience. The specific steps and processes may vary depending on the TAMP and the advisor's requirements.

What Are Common Mistakes When First Outsourcing?

It's understandable that many advisors feel like they need to do it all themselves. Oftentimes, the tasks tend to snowball as your business grows. But the truth is, outsourcing parts of your business to a turnkey asset management platform (TAMP) can help you focus on what you do best—building and maintaining relationships with your clients. With a TAMP, you can delegate the investment selection, wealth management, and operational task. Outsourcing these things gives you more time to focus on your clients and growing your business.

Still Doing the Investment Management

Some advisors find themselves still doing the same amount of work, because they don’t fully leverage the outsourcing firm. A TAMP can help you manage certain account types or your entire business. Advisors who outsource 50% or more of their AUM report that they save more time (about 1 workday per week) than those who outsource fewer accounts. Ongoing support and communication with the TAMP provider are crucial to ensure a successful relationship. To get the most out of your TAMP, you should be ready to step back from certain responsibilities and let the TAMP do the work.

Losing Control

The feeling of loss of control is typically a sign of a poor fit with a given TAMP. To avoid this issue, conduct a thorough assessment of a potential TAMP to find the one that offers you the right amount of flexibility. Most investment advisors will want to find a middle ground between so much choice that you essentially do the due diligence yourself and an overly restrictive offering that you have to accept and pass off to your clients.

Rising Costs

While there is a fee associated with outsourcing, 83% of advisors who primarily outsource with AssetMark reported that outsourcing reduced operating costs, and 93% reported increased business valuation. Between the operational savings and the growth in business, 92% of financial advisors who outsource with AssetMark reported increased personal income as a result of outsourcing. If you’re not seeing the growth nor the ROI, make sure you’re fully utilizing all that the TAMP has to offer.

Wasting time

With about one workday saved per week, some advisors are unsure of how to spend the extra time. Some advisors take time off for themselves to regain work-life balance, most (three out of four advisors) spend more time with their clients. If you find yourself not utilizing your regained timed, ask our business consulting team about our time management assessment tools and workshops.

5 Tips to Get the Most Out of Your TAMP

How can a TAMP help you focus on what you want to spend more time doing? What parts of your business could you hand off? How will a TAMP increase your profitability and impact your bottom line? Where could you use some expert insight?

1. Plan Your Growth Strategically

When you were assessing how outsourcing would impact your firm’s revenue and valuation, you may have completed a business assessment with AssetMark. Use that assessment to set data-driven goals and metrics based on industry benchmarks.

TAMPs enable long-term planning capabilities by providing actionable data insights to help you look ahead. You’ll be able to take a step back and develop big-picture strategies. Take advantage of the saved hours and data-driven insights by strategizing far in advance. 

2. Leverage the TAMP's Experience

Leverage the knowledge and experience of the TAMP's investment professionals to enhance your investment decision-making process. Engage in regular communication and collaborate to align investment strategies with client goals.

3. Utilize the TAMP’s Technology

Take full advantage of the TAMP's technology platform and tools to streamline your workflow, enhance efficiency, and improve client experience. Familiarize yourself with the features and functionalities offered and utilize them to their fullest potential.

4. Communicate with Your Clients More

By outsourcing investment portfolio and admin duties, you’ll be spending a lot more time in front of current and prospective clients. After all, the ability to spend more time with clients is one of the major benefits of a TAMP. Spending time with clients can do more for client retention and referrals than most activities on a typical advisor’s calendar.

Proactively communicate with your clients about the benefits of utilizing a TAMP and how it aligns with their financial goals. Emphasize the value-added services, professional management, and access to a diverse range of investment options. See this list of client questions and sample answers. (Link to new article)

5. Tap into the TAMP’s Business Consulting Support

From creating your value proposition to marketing, from team structures to client segmentation, from M&A to succession planning, the resources abound to help you grow your business. Not sure what your firm needs? Ask about our proprietary business assessments.

AssetMark can help you decide which tools and services are right for your practice. To learn more about what a TAMP can do for you, request a consultation with our team.