A streamlined investment management process is a key factor to the overall operational performance of an investment firm. The investment management process includes research, asset allocation, investment modeling, rebalancing and trading.
The first installment in our multi-part series on streamlining the investment management process is focused on Turnkey Asset Management Programs (“TAMPs”). TAMPs, by definition, provide a streamlined investment management process that is replicated across multiple firms. Through TAMP platforms, investment managers reach a wider audience of advisors, while gaining access to professionally managed investment styles.
ATOM ALIGN was initially designed to handle the robust rebalancing and trading requirements of a TAMP. Using the ATOM ALIGN technology firms can easily incorporate internal and external investment strategies into a single model, and then rebalance and trade across hundreds of accounts.
A traditional TAMP platform allows an advisor to outsource the technology platform required for asset allocation modeling, streamlined trading, performance reporting and other back office services. By outsourcing these services, RIAs can focus on client engagement, the financial planning processes, or other services that are core to an advisor’s business.
The success of TAMPs is evidenced by the growth of TAMP assets. According to Tiburon Research, assets grew from $16 billion to $250 billion over the past 10 years during a market period where the S&P 500 drew flat returns.
The investments used in a TAMP could be self-directed, but advisors often use investment management styles made available through the TAMP platform. Specific investment styles run by money managers or sub-advisors, can be incorporated into an advisor’s investment strategy.
These outside investment managers communicate their investment strategies, or models, to the TAMP. The TAMP then implements the changes across all associated accounts.
In some cases advisors can also manage their own strategies and utilize a TAMP for the purpose of outsourcing the rebalancing and trading processes. In either case TAMP platform providers are heavily dependent upon standardization and technology to manage their rebalancing and trading process and other operational services.
To achieve a straight-through processing, TAMPs must utilize integrated systems to handle each step including on-boarding, management of various investment models, individual investment accounts, billing requirements, performance reporting and trade execution. Firms who have successfully integrated their systems and standardized their operational processes can leverage their expertise by building an in-house TAMP with a goal to bring on additional advisors or smaller firms.
TAMPs can be beneficial to advisors looking to outsource business processes but the TAMP model can benefit any firm with its turn-key solutions designed for scalability.
Contact BlazePortfolio to find out more about how to use ATOM ALIGN to create a TAMP platform or just to streamline your environment like one.