Active investment management’s weekly magazine for fee-based advisors

What is a TAMP—and what are the benefits of working with one?

by Apr 12, 2023Advisor perspectives

What is a TAMP—and what are the benefits of working with one?

by Apr 12, 2023Advisor perspectives

Investment industry professionals consistently cite many meaningful benefits for advisors in working with TAMPs. These include sophisticated outsourced investment management, a robust technology focus, due diligence and accountability, and many efficiency advantages that can free up advisors’ time.

A recent article at The Wealth Advisor pointed out that based on an industry poll, “66% of advisors don’t understand TAMPs.” The article went on to explain “why advisors can’t afford to ignore this growth industry.”

Despite the amount of publicity around TAMPs (turnkey asset management programs) in recent years, the significant differences in the offerings by various TAMPs have likely led to confusion for many wealth advisors.

What exactly is a TAMP?

An article by Grier Rubeling, principal at Advisor Transition Services, addressed this issue. Despite being a seasoned advisory industry professional, she was having some difficulty in fully articulating the concept of a TAMP.

Rubeling found the definition offered by a business-development representative for a TAMP to be “simple, concise, and easy to understand.”

His answer? “A TAMP is a platform where an advisor can easily access suitability, investment management, and trading tools.”

Rubeling adds,

“When I asked why the definition of a TAMP was so confusing, he explained that not all TAMPs are created equal, and the reason they are hard to define is that they all have different offerings, focuses, and capabilities. You can’t just say a TAMP is a technology and trading platform, because that could be misleading or inaccurate. Instead, you must use more general terms to describe it. Thus, the confusion and mystery surrounding the term.”

The Wealth Advisor provides more detail on the current state of the growing TAMP segment of the investment industry:

“TAMPs (or turnkey asset management programs) are fee-based technology innovations that help financial professionals optimize their clients’ returns.

“This allows advisors to outsource the heavy load of investment management and compliance—so they are able to spend more time building stronger relationships with clients. …

“After a year when U.S. investors lost about $6 trillion, the top turnkey asset management program (TAMP) providers … are growing their assets at a healthy rate—no less than 24%—as the wealth managers that work with them expand organically, despite the biggest market downturn in over a decade and the worst pandemic in a century.”

Scott Martin, editor-in-chief of The Wealth Advisor, adds,

“It has been a chaotic year for many in the industry, but once again, TAMPs and their advisory affiliates were relatively cushioned from the shocks. The TAMPs we track are still growing their platform assets while the advisors that adopted 13 of the fastest-growing platforms on our list since 2020 have expanded to a net $300 billion in advisory assets. Just imagine what they will be able to accomplish when the market winds swing in their favor. … After years of disruption, outsourcing the portfolio isn’t just a niche decision for technophiles anymore.”

The benefits of TAMPs for advisors

No matter what the size or offerings of a specific TAMP are, industry sources tend to consistently cite many meaningful benefits for advisors in working with these providers of outsourced investment management, including the following:

  • Access to the experience, research capabilities, and focus of a dedicated team of investment strategists that many TAMPs provide—a resource virtually impossible for an advisor to match on their own. In addition, TAMPs can often provide access to a wide variety of sophisticated strategy offerings and turnkey model portfolio approaches that can meet client objectives across the risk profile spectrum.
  • Advanced technological tools that allow for integration with other technology platforms and services used by advisors.
  • Streamlined and automated investment performance reporting, as well as other back-office services (which can vary widely depending on the structure and offerings of a specific TAMP).
  • Speed and efficiency in making portfolio adjustments across an advisor’s client base. This is especially beneficial during periods of market volatility and potential significant drawdowns—where rules-based strategies employed by some TAMPs can help remove emotion and bias from investment decision-making and implementation.
  • Closely related to the point above, the time savings in working with a TAMP allows advisors to focus more on financial planning and other key product/service offerings, customer service and relationship-building, attracting and retaining clients, and managing their firm’s team and business-development efforts.
  • The advantages of being seen by clients as a collaborative investment consultant, conducting due diligence, assessing allocation and strategy alternatives, and monitoring performance versus objectives—rather than the day-to-day investment decision-maker and implementer. To this point, according to a study cited by, “almost 80% of high-net-worth investors think more highly of advisors using an institutional investment management approach.”

But this is not just a client perception benefit, according to a study on third-party investment management solutions highlighted in PlanAdviser magazine. PlanAdviser says 97% of advisors who outsource some or all of their assets are satisfied with the service, and 62% percent said they have grown their client base by outsourcing investment management.


For this issue, we asked several advisors the following question:

How do you see the benefits of third-party outsourced investment management as part of your firm’s overall investment philosophy?

Tyler Cleveland is a principal advisor and the CEO of Impact Wealth Group, a full-service financial-planning firm located in Delray Beach, Florida. Mr. Cleveland has diverse experience across the financial sector, a record of generating value for stakeholders, and deep knowledge of financial markets.

Mr. Cleveland says his firm has a productive relationship “with a highly experienced third-party investment-management firm that is a leading provider of risk-managed investment services and investment strategies.”

He notes that there are several features and benefits of working with this type of firm that help build value for clients, including the following:

  • A goal of preserving and growing capital through both a robust active management approach and investment risk management.
  • The use of highly diversified investment products and cutting-edge technology.
  • A focus on rules-based, algorithm-driven strategies that remove emotion and discretion from investment decision-making.
  • The ability to build client allocations using different managed strategies across multiple asset classes.
  • The use of strategies that seek to avoid steep drawdowns, take advantage of market opportunities when they are present, and play defense when it is appropriate.

Diana Avery, CFP, is the founder of Avery Financial Services, located in Atlanta, Georgia, and is an investment advisor representative of USA Financial Securities Corp.

She says that using managed accounts and the services of third-party investment managers “provides several benefits for our firm and our clients,” including the following:

  • Sophisticated, rules-based investment strategies based on proprietary models.
  • Strategies and options for portfolio allocations that can emphasize strong diversification and risk management.
  • The ability to take advantage of tactical or active portfolio strategies that can respond in real time to different market conditions.
  • The ability to modify a client’s portfolio allocations if objectives or life circumstances change.
  • A variety of portfolio options that are appropriate for clients across many different risk profiles.

Daniel J. Friedman is a founding partner and CEO of WMGNA Tax-Out Financial Solutions, an advisory firm headquartered in Farmington, Connecticut. He says, “Risk management drives our investment planning, along with having an asset-allocation process that meets clients’ objectives and allows them to effectively weather the inevitable volatility of the markets.”

Mr. Friedman notes that his clients’ investments are managed “individually, transparently, and proactively” according to the following four-step process:

  1. Define the investments. Mr. Friedman says his firm partners with some of the best providers in the investment industry. The firm’s TAMP relationship provides research and access to thousands of investments that were previously only available to the institutional community. The firm also has access to sophisticated hedge funds at significantly reduced minimums.
  2. Create a well-diversified portfolio that meets the client’s investment objectives, paying close attention to potential tax exposure. The firm’s independence and dual registration as an RIA and brokerage gives Mr. Friedman and other advisors at the firm the freedom to be investment-product agnostic and to seek opportunity within a robust universe of investment products and strategies.
  3. Guide clients to appropriate investments and strategies. The firm works with clients to select investments and strategies that help meet the clients’ goals, while also being focused on their risk tolerance, risk capacity, liquidity needs, tax situation, and comfort level.
  4. Monitor and maintain client investments. This includes making changes proactively based on progress versus objectives, the market environment, portfolio drifts, changes in money managers, and new opportunities that become available.

The opinions expressed in this article are those of the author and do not necessarily represent the views of Proactive Advisor Magazine. These opinions are presented for educational purposes only.


New this week:

David Wismer is editor of Proactive Advisor Magazine. Mr. Wismer has deep experience in the communications field and content/editorial development. He has worked across many financial-services categories, including asset management, banking, insurance, financial media, exchange-traded products, and wealth management.

Recent Posts: