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Turnkey Asset Management Program (TAMP)

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on September 12, 2022

Turnkey Asset Management Program (TAMP) eases the burden of financial advisors in managing their clients’ accounts.

Financial professionals often need to invest their own time in order to keep up with market changes, but the Turnkey Asset Management Program (TAMP) can save them from doing so.

TAMPs allow financial firms and advisors the opportunity for delegating responsibility when it comes to asset management research or portfolio allocation.

Sometimes, these things may not be within an individual’s expertise set of skill sets. TAMPs allow these individuals to focus only on providing client service where they excel instead.

TAMPs can also help financial advisors in crucial matters of scrutinizing investments, portfolio management, and tax concerns.

How Do TAMPs Work?

Financial professionals often have a lot of overseeing to do in their clients’ accounts. TAMPs assist them in certain areas so that financial professionals may be able to give more attention to other equally vital areas in handling clients’ assets.

Along with this, financial professionals will also be able to increase their earnings by making time to connect with new clients.

In exchange for this, a fee will have to be made by the financial professional to the firm who handles the TAMPs. Usually, the fee is based on assets under management (AUM) that the financial professional hands over to the firm.

The Benefits of TAMPs

The Benefits of TAMPs

Cost-effective for Financial Professionals

TAMP provides another alternative for brokers in outsourcing their investment or financial needs.

It can be costly to hire employees who are well-versed in certain subjects, so TAMP is an excellent solution in keeping costs low.

Eliminates Errors and Delays

TAMP allows financial professionals to delegate research or portfolio management into experienced hands.

This helps in preventing the negative effects of errors that are quite common among unskilled individuals, which can include incorrect market forecasts and missed opportunities.

It also eliminates delays caused by inexperience when it comes to making decisions on how portfolios will be managed or investments will be handled.

Frees Up Time to Meet New Clients

Financial professionals may spend a good amount of time on research and portfolio management, but this is no longer necessary once they embark upon a TAMP.

Instead of doing all the work themselves, why not simply pay a fee for an expert to handle it? This will give financial professionals more time to meet new clients and acquire business.

Types of TAMPs

There are many different types of TAMPs available for use, depending on the needs of individual financial advisors or brokers.

Mutual Fund Wrap Accounts

In Mutual Fund Wrap Accounts, the client’s assets are wrapped up in one convenient investment account so that transactions can be made quickly and easily.

Most mutual fund wrap accounts offer quarterly performance reporting in order to stay up-to-date with the market changes that happen throughout the year.

Separately Managed Accounts (SMAs)

These types of accounts are ideal for investors who have a huge amount of capital for investing.

It works typically similar to that of mutual funds but the account in this case is separately managed by a single investor versus a mutual fund which is owned by a number of investors.

Exchange Traded Fund Wrap Accounts (ETFs)

Similar to Mutual Fund Wrap Accounts, ETFs are pooled investments.

They are traded on the stock market and may be bought or sold at any time during market hours without restrictions like minimum investment requirements.

In contrast to a mutual fund, exchange traded fund wrap accounts are limited to only ETFs.

Unified Managed Accounts (UMAs)

This works for investors who wish to combine many different types of assets into one account.

An example would include combining stocks, bonds, and mutual funds as well as any other readily tradable securities or assets.

Unified Managed Household (UMH)

When two or more individuals share the same investment account, it is considered an UMH.

An example for this may be husband and wife who both share the same household financial plan.

Instead of having to manage their own individual portfolios, they can do so collectively through one account. This is also known as a co-managed account.

The Bottom Line

Now that TAMP has become a popular alternative among financial professionals, it is essential to understand the benefits this brings.

With outsourcing management responsibilities, companies can save money and time plus ensure that all investments are handled properly.

This will also allow advisers to make more connections with their clients instead of spending unnecessary time on research or portfolio management.

Financial professionals can save money, time, and resources through using TAMPs; this allows them to focus on handling their clients' portfolios instead of spending time on research or management.
Separately managed accounts are individual investment portfolios that are managed by a single investor versus a mutual fund which is owned by a number of investors.
An Unified Managed Account works for investors who wish to combine many different types of assets into one account. An example would include combining stocks, bonds, and mutual funds as well as any other readily tradable securities or assets.
A common disadvantage of TAMPs is the cost associated with it. While it may be cost effective for financial professionals, the cost of availing for TAMP could be passed on to the investor. Always make sure to get a proper and clear understanding of your advisor's fee structure so you can check if you are carrying the cost of a TAMP.
Your financial advisor will have limited control of the investment strategy that TAMPs are employing for your portfolio. Make sure to discuss your preferences to your advisor in terms of your risk tolerance and goals. Also, make sure that your advisor is updating you with regular portfolio performance updates.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.