The financial advisor of today is forced to be many things at once: a financial planner, guidance counselor, client confidante, and master of all-thing-back-office. To do all that and focus on client relationships means that something’s got to give. You can’t afford to spend the majority of your time
managing tedious back-office functionality – or hiring, onboarding and training in-house
employees to do it for you.
Working with a TAMP enables financial advisors to focus on providing holistic, professional guidance and support to their clients. How? The TAMP takes on those less valuable but still business-critical middle- and back-office tasks.
Since not all TAMPs are the same, it’s important to know what to look for – and what to stay away from – in a TAMP partner. Here’s our 5 red flags to avoid when evaluating the right TAMP for your firm.
1. A fee structure that doesn’t align with yours
When a TAMP outsources some services, or licenses some underlying technologies, fees can
skyrocket to account for the additional providers. Advisors should also look out for hidden
fees baked into some TAMPs’ limited lineups of models and strategists.
2. Outdated infrastructure
TAMPs should be constantly evolving with the wealth management landscape, bringing development teams, trading teams, and operations teams together to develop new capabilities in response to feedback and suggestions from their clients. A TAMP that’s unwilling, or unable, to adapt will in turn fail to help advisors future-proof their businesses.
3. An inability to scale with your growth
Do they grow with you as your AUM grows? Ideally, a TAMP will help you grow by enabling you to focus on deepening your current client relationships and building new ones. And as you do, your TAMP should be able to provide platform services and responsive, tiered pricing options that adjust seamlessly to your new needs.
4. Siloed workflows
Do they have integrated systems on their platform? When TAMPs build their own technology from the ground up using components designed to work together, advisors are able to run their entire practices through a single portal, from portfolio construction to reporting to billing.
5. Lack of service and support
Do you have a dedicated consultant or relationship manager, or does your firm get shuffled around to different 1-800 numbers when you have questions? Does the TAMP work with you to identify the tasks that make most sense to outsource, or do they expect you to conform your business to their one-size-fits-all model?
