What Is a TAMP? How Independent Advisors Outsource Investment Management

The short answer: A TAMP, or turnkey asset management program, lets an independent advisor hand off the investment work on some or all client accounts: model portfolios or outside managers, trading and rebalancing, performance reporting and billing, usually for a fee charged as a share of the assets in the program. The advisor keeps the client relationship and the financial planning. Advisors who leave a firm that ran these functions for them often use a TAMP to avoid building that infrastructure themselves, and some later bring the work in-house.

What a TAMP does

The core of a TAMP is the investment work an advisor would otherwise run alone:

• Portfolios, built by the TAMP itself or sourced from outside strategists and managers.
• Trading and rebalancing, kept in line with each client's target across accounts.
• Reporting on performance, for the advisor and the client.
• Billing, from fee calculation to collection.
• The connection to the custodian, where client assets are actually held.

Beyond that core, many providers handle tax-aware trading, separately and unified managed accounts, marketplaces of outside strategists, account-level sleeves, proposals and reporting built for compliance reviews.

How a TAMP is paid

TAMPs generally charge a fee based on a percentage of the assets in the program. Some advisors bill it to the client as a separate layer on top of their own fee; others charge one advisory fee and pay the TAMP out of it. Either way, the funds or managers inside the portfolios carry their own costs, so the number to compare across providers, and against running the work in-house, is the total cost to the client. Rates vary with the provider, the services used and the size of the practice.

Who keeps the client

The client is the advisor's client. The advisor holds the relationship, delivers the financial planning and decides whether to keep the TAMP or replace it. The TAMP works behind the advisor on the investment side.

The kinds of providers

TAMPs range from firms that run their own models and managed account programs, to marketplaces that give access to many outside strategists, to model and trading services built into custodian and platform technology. A supported-independence or RIA platform may include a TAMP inside a wider bundle of compliance, operations and technology; independent RIA platforms explained sets out how those fit together.

Build, buy or both

Outsourcing can be partial. Some advisors hand off the trading and keep their own models; others take a provider's models and run each client's tax management themselves. Advisors with their own investment process, or with the staff to run it, often keep more in-house; those who want their time on clients and planning often outsource more, and many shift the mix as the practice grows. What an independent RIA platform actually costs covers the cost side of these choices.

Where a TAMP fits in a move

An advisor leaving a wirehouse or broker-dealer usually leaves behind the firm's managed account programs, research and trading desk. Rebuilding that capability is one of the first decisions in starting an RIA, alongside custody, compliance and technology, and a TAMP is one way to have it in place when client accounts arrive. Which provider, platform or in-house setup fits a particular practice depends on its investment process and its book, and comes from a confidential conversation. Request an Introduction.