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Turn-key asset allocation programs have been available for decades, but technological advancements and industry changes have increased the popularity of these programs in recent years. For today’s investment advisor, TAMPs can be a vital administrative tool that has multiple benefits.

What Is a Turn-Key Asset Allocation Program?

Turn-key asset allocation programs are software applications that financial professionals delegate certain parts of their administrative operations to. The programs were first used in broker-dealer situations, but now they’re widely employed by financial planners.

While the exact implementation of TAMPs might vary slightly among these lines of work, the general way these programs are used holds true. The software helps financial professionals better manage their clients’ accounts by automating certain processes. These processes often include monitoring and adjusting clients’ portfolios per preset guidelines, and some TAMPs also come with backend services like paying distributions and handling billing.

For financial professionals, the investment positions that TAMPs monitor may include stocks, bonds, bank notes or other assets.

What Are the Costs of Using a Turn-Key Asset Allocation Program?

In exchange for the services rendered, turn-key asset allocation programs normally charge a small percentage-based fee. The precise fee charged depends on the TAMP, the assets under management, the complexity of the TAMP’s role and whether extra backend services are provided.

Financial advisors may choose to deduct this fee from their own, or they can charge their standard fee and let the TAMP charge its fee. The latter isn’t much different from how a mutual fund manager is paid one fee for selecting investments and a mutual fund advisor receives a separate fee for choosing the mutual fund.

What Are the Benefits of Using a Turn-Key Asset Allocation Program?

For financial planners, turn-key asset allocation programs offer multiple benefits. In short, they automate processes that planners did manually in the past and thereby, free up a financial planner’s time. This time can then be spent on more productive tasks, such as:

·         Researching potential investment opportunities

·         Meeting with clients to offer a higher level of service

·         Applying expertise and knowledge to help current clients

·         Reaching out to find new prospective clients

·         Learning about additional areas of specialty to distinguish a firm

No matter what a firm’s precise needs are, all of these activities tend to be more helpful than simply checking holdings and moving items around.

Who Is a Turn-Key Asset Allocation Program Right For?

Turn-key asset allocation programs have been around since at least the 1980s, when they were mostly used in broker-dealer relationships. Now, they have a much wider appeal and are especially helpful to financial advisors -- and not only because the programs save time.

Clients no longer come to financial advisors for help in one specific area of expertise. Now, most clients want their advisors to take a comprehensive approach and provide guidance on many issues related to finances and investments.

This frequently leads to advisors providing guidance in multiple areas, often including areas outside their true scope of expertise. When faced with a dilemma beyond their particular expertise, advisors can rely on TAMPs to distill the most essential information so that they can provide informed advice on a wide range of financial matters.

Improve Your Service with a TAMP

If you’re in the financial advising space and not using a turn-key asset allocation program, contact one of our representatives to learn more about these applications and how one could help your particular advisement firm. We’ve worked with many advisors, and our Regional Marketing Associates would be happy to assist you. To see for yourself how a TAMP works, download the Dunham Asset Allocation Program Design Process. This educational paper describes how the program works, and it’s benefits.

Click here to download the Dunham Asset Allocation Program Design Process.

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