In a world where industry changes are measured in months rather than years, keeping pace with industry trends is a must for growing Registered Investment Advisors (RIAs). Not only will you need to offer a broad spectrum of investment choices and leverage a cutting-edge operating platform, but your customers will expect as much— and your competitors will be looking to do the same.
Staying viable in the investment business often depends on an RIA's ability to remain flexible and adapt to the changing needs of clients through up markets and inevitable downturns. In the corporate arena, agility is often touted as a way for companies to quickly react to evolving circumstances that impact the customer experience.
For RIAs, the same objective can be accomplished by choosing a Turnkey Asset Management Platform (TAMP) that understands your business and helps you stay nimble throughout all market cycles.
Much of an RIA's success revolves around the ability to stay focused on client relationships while operations flow smoothly in the background. When back- and middle-office processes require less time and fewer resources, RIAs can dedicate more time to growing assets under management (AUM) and crafting innovative investment solutions for both new and existing customers alike.
With larger TAMPs, their size and business model don't necessarily give advisors all of the advantages that a more robust platform is able to provide.
When you think about the dynamics of an effective TAMP, an integrated blend of operational technology and advisory services will yield the most value for any RIA. The benefit of an integrated team assumes that the platform's developers have full control over the design and functionality of the technologies deployed. In this way, developers could impart advisors with more control over processes before and after the trade.
Some TAMPs model systems around feedback and recommendations from advisors who have a solid feel for how administrative workflows should meld with portfolio management services.
Just as an advisor's relationship with a client grows and flourishes from an early stage onward, so too does an RIA's partnership with a TAMP. In both cases, the objective is to form a long-term bond from which both parties mutually benefit.
The deeper the insight a TAMP can gain into the practice of an advisor, the more likely it is that the platform may be able to customize processes to the unique preferences of the RIA. On the investment side, the advisor should also have the option to choose between outsourcing investment management solutions or pursuing do-it-yourself portfolio construction over which an RIA has more discretion.
On the side of an innovative TAMP, sustainability results from its ongoing capacity to adapt RIA solutions to the frenzied pace of technological advances. RIAs can gain a competitive advantage by engaging platforms that own their technology, giving developers the opportunity to quickly react to market or client requirements. By understanding all of what makes a platform tick, these providers can continuously upgrade software when circumstances demand adaptability and change.
Like an advisor, staying power in the TAMP space requires that these platforms possess the foresight and expertise to stay ahead of the competition. A TAMP that deftly combines technological prowess with flexible portfolio management services gives RIAs the best of both worlds.
Riding along with the big players in the TAMP industry, it might be easy for an advisor to feel stuck in place. You get what you get, and the ability to have a say in how systems feel and function is largely absent. To compound the situation, there could be a disconnect between a client and a TAMP’s customer service department. This disparity further adds to the isolation and gives the impression that an advisor is just another number.
On top of that dilemma, inflexibility with fee arrangements may see those expenses significantly cut into your bottom line— and the net investment returns of your customers.
Not all TAMPs follow this prescribed formula, however. Coming to the fore are agile platforms that transform an RIA's input into a memorable user experience and increased customer satisfaction. TAMPs that can think on the fly and respond to the demands of its client base will be adequately positioned to travel with you on the journey to success.