Technology never sleeps. Client expectations never diminish. And as 2020 has shown us all, nothing is a given or remains the same.
While guiding clients through these extraordinary times, financial advisors who depend on a Turnkey Asset Management Platform (TAMP) may ask, is my platform keeping pace? Is asset management the platform’s strength or is it technology? Which is most valuable to me for my clients?
These are questions worth answering because the decisions advisors make when selecting a TAMP will not only shape their practices for years to come but will have significant impact on their future success. As advisors who use TAMPs look to the future, they will need to determine if they want to work with a provider that offers flexible model solutions such as advisor-managed, third-party managed, OCIO models of models, etc., or a provider that has developed its own technology. Or perhaps a firm that has both.
The changing role of financial advice
Few would argue that the financial services industry has seen dramatic change over the last two decades. Where advisors once served the heady role of gatekeepers to the markets and investment experts, today it is different. Now, investors find answers to their most challenging financial questions with a few simple clicks. Advisors, to their credit, have adapted to this change in investor behavior with the same resilience they have exhibited ever since their profession began.
Investors today depend on advisor experience and wisdom to help them understand an increasingly complicated environment. As they spend more time working directly with clients, advisors are recognizing how many operational functions can be more efficiently outsourced, including trades, rebalancing, account maintenance, billing, and reporting.
When it’s working best, a TAMP allows advisors more time for personal attention, financial planning, developing deeper relationships, and welcoming new clients.
Platforms that manage their own technology are better positioned to seamlessly integrate new capabilities for a smoother, intuitive user experience. By listening to advisor needs and analyzing industry trends, companies with these capabilities can deliver solutions that develop naturally and integrate fully.
And of course, another important benefit to maintaining a team dedicated to technological function is cost. Without paying an outside firm – and passing along that added expense to clients – providers with in-house capabilities may be able to match a higher level of service at a more competitive cost.
Cannot see the future. Can prepare.
Ah, 2020. A global pandemic, roiled markets, oil prices in freefall, and social unrest like we have not seen in decades. No one saw all this coming. No investor, no advisor, and no TAMP. But by placing equal weight on financial strategies and technological services, a balanced TAMP stands ready to adjust and react to advisors’ demands, whatever comes down the road.
“The TAMP industry has changed and evolved remarkably well since the first platforms emerged over thirty years ago,” said Colin Falls, President of GeoWealth. “The global influences we are experiencing now will only accelerate demand for new solutions, and those firms that are committed to solving the challenges advisors encounter, will be the TAMPS that thrive.”
Platforms that enable advisors to efficiently reach and engage with clients at this moment in time are proving to be quite valuable. Just consider, in the first half of 2020, we saw the second largest daily percentage drop in the Dow in history. We also saw the fourth largest daily percentage gain. March 2020 was the most volatile month in market history. That is a roller coaster that few investors can ride out of unscathed. Clients need their advisors more than ever and TAMP providers that can quickly adjust to the changing needs of advisors in these moments of uncertainty are likely to become the providers of choice going forward.
Solutions for you, not for everyone.
TAMP may start with the word turnkey, but that should mean solutions that are unlocked, not locked down. By embracing a service model dedicated to providing not only premier investment management solutions, but also technological function, efficiency, and design, a TAMP can deliver a comprehensive, seamless experience that helps financial professionals provide the attention, guidance, and confidence investors need and value most.
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