Why TAMPs are ‘a powerful tool’ for advisors

Advisors looking to devote more time and energy to their business may want to consider investing in a turnkey asset management platform.

A recent RIA Lab, Evaluating and Comparing TAMPS, sponsored by AssetMark, discussed everything from the myths that surround TAMPs to the core benefits of using them.

There was no shortage of experts on the panel either. Advisors from Anchor Pointe Wealth Management, Sowell Management, Adhesion Wealth and Sovereign Financial Group all provided the audience with insightful knowledge of investing in TAMPs.

As the panelists agreed, a TAMP is a powerful tool that advisors should be incorporating more into their practice – especially when it comes to growth and scale.

“At the end of the day, the concept of a TAMP is that advisors are outsourcing investment management, to affirm to take over investment administration so that they can grow and then scale their practices,” Barrett Ayers, president and CEO of Adhesion Wealth, said. “It's a continuum of various investment outsourcing capabilities.”

For Deriek Hodges, founder of Anchor Pointe Wealth Management, he saw incorporating TAMPs as sort of a “contingency plan”, but one that was ultimately beneficial when it came to succession planning.

“It does give the credibility that there's a great process behind Anchor Pointe, which is a small firm. I have the autonomy to run the planning practice the way I want. And now I know other advisors that I could have struck a contingency agreement with, if that was necessary,” he said.

You can view the recorded session of the Dec. 7 webinar here.

Ayers added TAMPS are essentially like a spectrum. “On one end of the spectrum, you have something that's fully curated, a provider who provides investment management only. On the other end, you've got something that can be fully open architecture and allows advisors to build their own investment offering. In between are literally dozens and dozens of capabilities layered on to make them different and distinctive.”

Other benefits that come with TAMPS is the technology that come with them, ultimately saving advisors time and letting tech do the rest.

“I think the biggest ‘aha’ was that advisors found that they got an additional eight hours a week when they started outsourcing on the investment side,” Sara Paulson, division manager for Central U.S. at AssetMark said, referring to an AssetMark study. “When you think about getting an entire day back to serve your clients or spend time with your family, I'll take those eight hours any day.”

Ayers said advisors are being asked to do more with less, which results in outsourcing becoming a necessary requirement to achieve scale. “I predict that in the next few years, it will become so commonplace in fact that this label of TAMP will just disappear. It's just what advisors do.”

Hodges shares a similar sentiment with Ayers, saying it’s a misused term.

“I think TAMP might not even be the term we should be using anymore because I think it’s got baggage with it,” he says. “What we probably knew of five and 10 years ago is not the world today. Be curious. Look what’s great for your business.

“Any of us will try to help get you where you need to be to get you to the right answers for your practice. That's what makes this a fun business and a fun time to be in this business.”

Aside from TAMPs, another key takeaway from the panel was how advisors can run a profitable smart business where you’re building value. Bill Sowell, CEO at Sowell Management, said. “A lot of advisors focus more on the practice side of it, and not the business end of it.”

Paulson, whose organization sponsored the Lab, left the audience with a challenge – one that left them a little more confident and a little more inspired.

“The next time you have a prospect in the office, when they leave, take a moment and think about the conversation that's happening in their car on the way home,” Paulson said. “Is the prospect thinking? “They really understand what we're trying to do. They seem to really be able to get us there. We trust them. They're not focused on the small things; they're focused on the outcome.”

As for what’s next in the RIA Labs, Chuck Failla, moderator and founder and chief executive of Sovereign financial Group, provided a possible idea that would bring the TAMP discussion back into the fold.

“There are TAMPs right now that are offering option overlays strategies on top of portfolios, which I think is really fascinating,” Failla said. “That would be really warranting its own Lab onto itself. Do some research. There’s almost anything in this industry that’s either being done right now or being worked on. There's so much great technology that's happening.”You can view the recorded session of the Dec. 7 webinar here.