RIAs leverage TAMP tech the most: Report

The industry’s embrace of financial planning as the new business model for growth will push more advisers to use turnkey asset management platforms as automated wealth management systems to free up their time as they focus on clients’ holistic financial wellness, according to America’s Best TAMPs — 2021 Edition published last Thursday by Wealth Advisor.

In fact, TAMPs hold more than $2 trillion in assets under management and administration, according to estimates from Tiburon Strategic Advisors. An adviser with access to a TAMP can offload many of the traditional responsibilities of managing client money — from onboarding to rebalancing — and let the robots and automated tech do the heavy lifting at a fraction of the cost. TAMP fees can run from 85 to 280 basis points depending on the underlying complexity and cost of the incorporated investments, according to the report. 

Registered investment advisers are making the most use of TAMPs, with $93.07 billion in assets on the platforms, compared with independent broker-dealers, at $24.41 billion and wirehouses at $17.15 billion, according to Wealth Advisor. 

“This delegation of labor allows advisors to concentrate on what they do best, which generally revolves around sophisticated investment strategies, financial planning, or the intricacies of relationship management,” said Scott Martin, editor-in-chief of the report.

Having more time to serve clients’ needs was the most popular reason for partnering with a TAMP, cited by 25.37% of TAMP users. Other top reasons advisers give for leveraging TAMPs included offering best-of-breed investment management (23.88%); making expenses scalable in the event of a market crash (20.15%); and achieving operational cost savings and gaining efficiency (18.66%). 


The dominant players, like TAMP powerhouse Envestnet, have found scale in mergers. Another top TAMP, AssetMark, realized growth recently through an initial public offering. Smaller firms have been absorbed into larger companies, like Orion Advisor Solutions’ purchase of Brinker Capital last year or Vestmark’s deal with Adhesion in 2018

Other TAMPs fighting to grow their market share have developed their own ways to compete. For example, Adhesion Wealth Advisor Solutions, an RIA-focused TAMP with $13 billion on its platform, has grown by offering an account-by-account solution for advisers who are not ready to move all their clients’ assets to the platform. Adhesion credits this flexibility as a key differentiator, according to the report. 

Still, Envestnet reigns as king with assets under management that clocked in at $229 billion as of September, according to the report. Envestnet CEO Bill Crager credits the company’s growth to the TAMP’s 20-year-old financial wellness infrastructure, which aims to connect a client’s day-to-day transactions and the decisions they make to buy, save, invest, borrow, protect and earn with their ability to achieve their long-term financial goals. 

“We believe the industry will continue to embrace digital innovation that strengthens the combination of data analytics with wealth management,” Crager said in the report. “Regular communication with the advisers that rely on our unified advice platform has been key to helping them — and their end clients — navigate volatility.”

SEI holds the second spot in terms of total AUM at $69.4 billion. For SEI, 2021 brings new opportunities to enable client collaboration through a combination of asset management and technology, said Kevin Crowe, SEI’s head of independent advisor solutions. 

“This includes offering a more flexible investment program and the SEI Wealth Platform to provide a personalized, end-to-end client experience designed to meet their goals,” Crowe said in the report. “The future is all about catering to the changing consumer. Personalization is the future of the wealth management industry.”

AssetMark ranks third with $67.3 billion in AUM.

Orion, which now includes Brinker Capital, boasts $48 billion in AUM. Orion CEO Eric Clarke said the wealth tech platform, which also offers TAMP products, doubled down on video, podcasts, flash briefings, etc., demonstrating to advisers how to leverage Orion’s technology suite to provide increased value to clients.

“We opened the door to Orion Planning for free, self-guided adviser access for several months, knowing their need for in-depth financial planning tools and technology,” Clarke said in the report. 

Trailing directly behind is Morningstar with $41.8 billion in AUM; Dynasty is in sixth place with $24.14 billion in AUM. 

Dynasty’s focus on the RIA channel remains strong as the firm believes the move to the independent space will continue into 2021, said John Sullivan, Dynasty’s director of business development.

“The RIA channel remains strong and is winning disproportionately against other wealth channels,” Sullivan said in the report. “We see increased transparency as paramount. We see investments in technology accelerating.”

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