What Is a Turnkey Asset Management Program (TAMP)?

A turnkey asset management program offers a fee-account technology platform that financial advisers, broker-dealers, insurance companies, banks, law firms, and CPA firms can use to oversee their clients’ investment accounts. Turnkey asset management programs are designed to help financial professionals save time and allow them to focus on providing clients with service in their areas of expertise, which may not include asset management tasks like investment research and portfolio allocation. In other words, TAMPs let financial professionals and firms delegate asset management and research responsibilities to another party that specializes in those areas.

Understanding Turnkey Asset Management Programs

Delegating the role of asset manager to a TAMP can help financial professionals and firms to increase profitability by freeing up more time for tasks like attracting new clients and meeting with clients in person. These programs can also save their clients money because developing a proprietary asset management system can be expensive, especially if the company does not already have one in place. TAMPs also handle account administration, billing, and reporting.

Key Takeaways

  • Turnkey asset management programs are fee-based platforms for asset managers, broker-dealers, CPAs, and other financial professionals.
  • TAMPs can offer technology, back-office support, and tasks like investment research and asset allocation.
  • Envestnet, SEI, AssetMark Financial, Brinker Capital, and Orion Portfolio Solutions are examples of TAMP providers.
  • Turnkey asset management programs can help firms save time and allow them to focus more of their energy on finding new clients and servicing existing ones.
  • By working with a third party, the user of a turnkey asset management program is giving up some control of some of the decision-making process, while also paying a fee for the service.

Using TAMPs also helps wealth advisers limit their risk of being sued for poor investment performance. By outsourcing investment selection and management, firms can transfer part of that risk to the TAMP. Major turnkey asset management program providers include Envestnet, SEI, AssetMark Financial, Brinker Capital, and Orion Portfolio Solutions.

Examples of Turnkey Asset Management Programs

Mutual fund wraps, exchange traded fund wraps, separately managed accounts, unified managed accounts, and unified managed households are five types of turnkey asset management programs, which typically charge fees of about 0.85% to 2.80% depending on the amount of assets under management and the complexity of the investments held.

TAMPs are available in both off-the-shelf and customized varieties. They are often privately labeled, meaning that it is not apparent to clients that a third party is handling their investments. In addition, these programs serve all types of investors, from mass-market, lower net worth clients to ultra-high-net-worth individuals.

TAMPs provide base technology and additional “back office” support, such as setting up automated alerts, asset tracking and reporting, and other dashboard features. The service might also include supplying proposals, wealth management tools, compliance services, investment policy statements, and might also conduct a risk analysis.

Even with these benefits, TAMPs include caveats. For instance, the fees for using a turnkey asset management program can start at 0.85% and increase from there. Moreover, by involving a third party, a financial advisor does not have as much direct control compared with overseeing client investment accounts on their own.