Shouldn't the Advisor Be In Control? Why Investment Flexibility Matters.

Published December 1, 2020

As a Registered Investment Advisor (RIA), much of your clients' satisfaction will hinge on the array of investment choices you can offer to clients. The more ammunition an advisor has to meet client needs and fulfill investment objectives, the greater the chance that you will enhance engagement and build loyalty with customers.

In the RIA arena, it's beneficial to have flexibility with the platform you're using to run your business. If you've chosen the independent route to manage your career, it's likely you've developed a preference for how to accomplish objectives and goals. Some Turnkey Asset Management Platforms (TAMPs) align more closely with your style and finding the right solution will make it easier to hit those milestones.

In what follows, we examine some of the benefits of a flexible TAMP contrasted with the limitations of a rigid platform.

The Unique Needs of an RIA

If you've come to adopt your own style of business operations, it's safe to say that processes, procedures, and your overall entrepreneurial focus differs from that of your competitors. It might hold that there's not a right way or a wrong way to solidify customer relationships, but selecting a TAMP that can adjust to your unique needs can help things run smoother. 

Much of the distinction between large TAMPs and more nimble platforms manifests itself in the ability of that platform to allow a do-it-yourself portfolio option or rely on the pre-configured solutions. Some of the bigger industry players and third-party programs leave an advisor with no choice but to select from a handful of outsourced packages. While these methods may be suitable under some circumstances, they tend to be less inventive and customizable when it comes to today's more sophisticated clients and prospects. 

And it need not be one delivery method or the other. It's advantageous to offer a mix of both third-party and in-house solutions depending on a client's own unique requirements. In the ever-evolving world of publicly-held and privately-offered securities, having more choice creates appeal for a broader swath of investors. 

Does One Size Fit All? 

When you consider using a TAMP, it can't always be assumed that bigger is better. Very often, large providers fulfill expectations, but how much control do you have over investment choice—and perhaps equally as important—how are those limited choices subtracting from your bottom line? It could be that you're running up against pricing inflexibility and when the level of fees comes into question, perhaps it's prudent to explore some alternatives. 

Large TAMPs can be very firm with their pricing structures. As a result, you may be restricted in the ability to negotiate fees or carve out services that you'll actually use and need. Many advisors may feel frustration with those limitations without realizing that there are TAMPs that not only provide the opportunity to mix and match investment platforms, but also own the technology that drives the solutions. This fact is especially important when tailoring the program specifically to the way your individual business operates. 

Finding a TAMP that can offer certain technology upgrades and tailor the platform to your needs has dual advantages. You'll be able to stay ahead of the continual curve of automation and innovation, and perhaps lock down price points that take less of a bite out of gross revenue. 

The Bottom Line

For advisors ambivalently glued to legacy platforms and actively seeking a competitive edge that an inventive TAMP can bestow, it's critical to understand how increased control and flexibility help that objective become attainable. In the fast-moving RIA space, the rubber meets the road through partnering with a TAMP that understands how to move your business forward. The answers are within reach and sure to bear fruit for your firm. 

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