Maybe you find yourself providing services to clients that veer outside of your core specialization; maybe the list of things that you’d like to accomplish if only you had the time is growing longer and longer; maybe you want to grow your practice but don’t have the capacity to start. Whatever the reason, you’ve started to consider working with a turnkey asset management platform in order to reach your goals.
By outsourcing your investment management, gaining back-office support, access to powerful technology, and more, you’ll be better equipped to meet your goals and deliver a higher level of service to your clients. But being a financial advisor means doing your due diligence first. In that spirit, here are 7 questions you can ask to help you evaluate a prospective turnkey asset management platform.
1. How “Turnkey” Do I Want My TAMP to Be?
Turnkey asset management platforms (TAMPs) vary in terms of how much flexibility, guidance, due diligence, and variety they offer. Some act like supermarkets; once you sign up, you can browse a vast library of investment models, funds, strategies, research, and more, picking the ones that seem to match your practice’s investment philosophy best. The downside here is that you may feel overwhelmed by choice, and you can’t guarantee that each solution will adhere to the same level of quality.
On the opposite end of the spectrum, you might find a TAMP that only offers a handful of investment strategies and solutions. For the price of limited variety, you gain the peace of mind that each has been thoroughly vetted for inclusion into the platform.
For many advisors, the ideal is somewhere in the middle—some TAMPs conduct thorough due diligence on a medium assortment of asset management solutions. Rather than offer a supermarket or a point solution, these TAMPs provide a curated library of solutions.
2. What’s Their Due Diligence Process Like?
When you work with a TAMP, you effectively adopt their due diligence process as your own. As a financial advisor, you have a fiduciary responsibility to your clients to make a good faith effort to provide the optimal financial services possible. So, when you work with a TAMP to identify the right investment strategy for your clients, you need to make sure that they’ve validated those strategies to a degree that meets your standards.
3. Do They Align with My Own Investing Philosophy?
If your prospective TAMP has a robust evaluation and due diligence process for its investment strategies, that's great. But you also need to make sure that their evaluation criteria aligns with your practice and your principles. After all, a given solution might meet a TAMP's overall strategy, but that doesn't necessarily mean it will meet yours.
What kind of risk tolerance do you and your clients have? Do you emphasize environmental, social, and governance (ESG) principles in your investments? Does your practice specialize in a more active or a more passive approach to investing? Make sure you’ve answered these and similar questions for your own practice first. Then, consider whether your prospective TAMP follows the same principles.
4. What Kind of Digital Experience Do They Offer?
Today, nearly every element of our lives is mediated through some form of digital experience. Watching movies, listening to music, banking, paying bills, work—all of these occur through digital portals that work seamlessly to provide a faster, easier experience. Connecting with a financial advisor and managing investments and financial goals should be the same.
Evaluate what kind of technology your prospective TAMP uses. A highly visual investor dashboard can help your clients understand their financial wellbeing at a glance. If it’s mobile-friendly, so much the better. Can these solutions be white-labeled? Are there modeling tools you can use? Suppose you use a CRM like Redtail; will their technology be easy to integrate? The value of a compelling digital experience—whether that’s from the client’s perspective or your own—should not be underestimated.
5. What Does Their Back-Office Support Look Like?
Why do financial advisors choose to work with a TAMP in the first place? Often, it’s so that they have more time to spend engaging with clients, learning about their lives, and planning out their financial futures. That front-office work drives referrals, client satisfaction, and other positive outcomes. But it’s supported by all the work that takes place in the back office—the technology, the investment management and monitoring, the administration, and more.
Different TAMPs provide a spectrum of back-office support, but realistically, the more a TAMP has to offer in this domain, the better. When you work with the right TAMP, it should feel as though you’ve hired your own operations professional to support your practice’s back-office functions.
6. Will This TAMP Help Me Grow My Business?
Working with a TAMP isn’t just about outsourcing investment management or just getting assistance in your practice’s back-office operations; fundamentally, it’s about improving your business.
It’s important to remember that your financial advising practice is a business. A TAMP should be able to provide you with the support and guidance that will take your business to the next level—that is to say, to support your strategic growth plans, marketing initiatives, and business needs in addition to your investment management and back-office support.
Not all TAMPs do this; when you encounter one that does, you can feel confident that they view working with you as an investment, and they want to see you grow.
7. Do I Feel Comfortable?
Once you’ve found a TAMP that checks all of your boxes, ask yourself: Do you feel comfortable working with this organization for the long term? Ideally, the relationship you’ll have with your TAMP won’t be a transactional one. They shouldn’t merely provide access to investment strategies in exchange for a fee. Rather, they should be a trusted guide, much in the same way you’re a trusted advisor to your clients. Thus, it’s important that you actually like your TAMP and want to work with them over the long term.
Finding the Right Fit
Every TAMP is different, which is why it’s essential that you find the one that’s right for you. For over 8,500 financial advisors, AssetMark has been the right one. If you want to kick off the evaluation process and ask us some of these questions, reach out and request a consultation today.
