Enhancing Expertise, Benefits for TAMPs

Turnkey billing/revenue management adds another level to client service

November 08, 2021 | Product News

Turnkey asset management platforms (TAMPs) hold more than $2 trillion in assets under administration (AUA), according to a 2021 estimate in Wealth Advisor’s latest report, “America’s Best TAMPs 2021 Edition.” This is up from estimates in 2011 of less than $147 billion in AUA. While this robust growth trajectory is a bullish indicator for the future of the industry, TAMPs still face a highly competitive environment where the most innovative thinkers dominate in a fractured but steadily consolidating industry.

TAMP platforms have enjoyed such popularity because they offer clients a sophisticated outsourced solution that makes clients’ lives easier. Depending on the specific agreement, a TAMP platform can be involved in running virtually all aspects of a client’s investment management and back-office support functions. This relieves clients of responsibilities such as investment research, manager due diligence, portfolio construction, rebalancing, reconciliation, performance, and tax reporting—as well as billing and revenue management.

Clients embrace this outsourced approach because TAMPs provide focused expertise in the complex domain of asset management, where they have demonstrated their ability to quickly adapt to changing trends and to turn industry insight into innovation. In short TAMP platforms exist to make their clients look good—and that formula works. With investment management tasks expertly handled by the TAMP platform, clients have more time to excel at what they do best—interfacing directly with end investors.

Redi2’s Wealth Manager^TM (WM) platform provides similar expertise in the complex realm of billing/revenue management and our software performs a similar task for TAMPs—outsourced expertise. Designed with a data and workflow model that captures and understands the TAMPs business model, WM can expertly handle even the most complex billing and revenue management requirements for TAMPs of all sizes. In short, we make TAMPs billing processes more efficient and reduce costly errors. This frees TAMPs to focus on their expertise, while still offering best-of-breed revenue management functionality to their clients.

WM is built to handle the most complex client billing relationships and our singular focus helps us stay on top of changing trends and helps us build appropriate new solutions into our platform as industry evolution demands.

Here are the Top 10 benefits that Redi2’s Wealth Manager platform provides specifically for TAMP platforms:

• Managing multiple client firms: WM can easily manage multiple client firms, which are often encompassed in one TAMP platform. WM can accommodate even the largest TAMP, for example, 90,000 advisors and 2,900 companies—each with its own billing rules and parameters. WM is built precisely to tame these types of highly complex billing and payout challenges. Niche TAMP platforms with fewer client firms, but equally complex products are also easily accommodated by WM.
• Flexible functionality: Client billing requirements can be highly complicated and customized, and this complexity can trip up one-size-fits-all billing systems. WM offers extensive entitlement solutions to customize the ability of each user under an individual client to provide specific assigned functionality and to restrict views to only the data appropriate for each user.
• Variable fee options: WM can run TAMP clients’ advisor-related fees according to their preferred frequency (monthly, quarterly) and methodology (forward, arrears), while segregating the institutional-related fees. This segregation allows a TAMP to run the institutional-related fees across all the TAMP’s firms while allowing each firm to run their advisor-related book-of-business using the frequency and methodologies that best suit their needs.
• Specific manager assignments: WM can assign specific investment managers and their related investment styles to each firm. This allows for precise compensation for actual performance based on assets under management (AUM) for each manager’s individual sleeve. TAMP clients can also provide compensation details to investment managers who may have questions, which helps build trust in these relationships.
• Unlimited fee schedule capabilities: Using its payment model concept, WM can efficiently handle hundreds of fee schedules related to an unlimited number of fee types for a TAMP’s client firms, including multiple investment offerings, model portfolios, and third-party managers.
• Precise regulatory controls: WM can track changes and overrides within our fully auditable software allowing TAMPS to feel confident that they have proper documentation for Securities and Exchange Commission (SEC) audits or other regulatory needs.
• Account segregation within firms: WM can segregate accounts and assign different, specific billing attributes to each group of accounts within a firm. This allows TAMPs to provide maximum flexibility for clients who have varied fee/compensation structures.
• Advisor portal provides direct data access: Wealth Manager Xplorer (WMx), our advisor portal, allows clients using a TAMP platform to stay informed and to glean business intelligence from their data. They can see their book of business in multidimensional ways, through rich, dynamic dashboards with actual data straight from the TAMP’s back office. This gives advisors further insight and strategic business intelligence while providing the TAMP platform with a valuable add-on feature that clients value.
• Advisor-level analysis and insight: WMx also provides TAMP platform advisors with the ability to analyze their revenues to better understand their customers’ fees and stay on top of their value-added service and investment advice.
• White-label branding: Our WMx advisor portal can be “white-labeled” with both the TAMP’s and the firm’s branding, deepening their relationships with their mutual clients.

Due diligence

It’s no secret that due diligence is a huge part of any new TAMP engagement. Beginning a relationship with a TAMP requires careful consideration by prospects. They need to be comfortable because these engagements are generally long-term and difficult to reverse if the client finds services lacking. Typically, potential clients examine all aspects of the services a TAMP provides and then carefully weigh their options before selecting a TAMP partner. WM capabilities on the revenue management side provide an additional layer of comfort for prospective clients. WM allows TAMP platforms to offer the same sophisticated, flexible, best-of-breed options within their revenue management as they do within their investment management programs. Due diligence can go a long way toward finding a cultural and capabilities fit that will work for both the advisor and the TAMP—and WM can provide the tipping point on the revenue management side.

In all industries, but particularly within financial services, businesses excel by focusing on their expertise. For TAMPS, success is based on providing turnkey access and state-of-the-industry sophistication for both the investment management and back-office operations. For Redi2 Technologies, our success is based on providing TAMPs with unmatched revenue management solutions while allowing them to avoid the costly and complex burden of software and hardware management.

Schedule a demo

Redi2 Wealth Manager is a cloud-based solution specifically designed to handle all the billing complexities of TAMP platforms. If you’d like to take a tour of Redi2’s Wealth Manager platform, contact us at info@Redi.com or call 877-668-4824.