Every year takes us all a little farther into the future. Computing power evolves, doubling every 24 months. Our clients approach their financial goals while the next generation waits in the wings.
The long-term story is bright. But as we note in the introduction to the newly released America's Best TAMPs 2021, some years are a lot bumpier than others.
That's where opportunities emerge. While several once-promising turnkey asset management platforms had to drop out of our list, new and more ambitious people stepped up to replace them.
We're proud to welcome Morningstar to our universe. Yes, they do a lot more than rate funds. Their technology also gives participating advisors an end-to-end system for managing client money from proposal to performance attribution, bringing in proprietary investment expertise from some of the world's top managers.
They already run nearly $42 billion in outside advisor accounts, making them one of the biggest outsourced portfolio platforms on the planet. Upstart "robo" providers can only dream of that kind of scale . . . and the program is still virtually unknown to many advisors, effectively a secret weapon in the industry.
We've also added a separate section for Strategists this year. At this stage, the big platforms like Morningstar, Envestnet, AssetMark, SEI and Orion (of which more in a moment) can host practically infinite investment models.
Some of these models are truly breathtaking in their ability to raise the efficient frontier . . . but they get lost on the infinite shelf, buried in the sheer diversity of niche strategies available as well as the endless index copycats.
Orion Advisor Solutions was recognized by readers as the #1 TAMP of the year. "Outsourced asset management has never played a more vital role in the fiduciary future of our industry. In order to thrive as entrepreneurs and offer an outstanding client experience, advisors need individualized investment strategies in a tech-enabled framework that links to every step of the advisor-client journey. We're humbled by this recognition from The Wealth Advisor's readers," said Eric Clarke, CEO, Orion Advisor Solutions.
We want to make sure advisors using these platforms don't miss the real innovators available, especially when so many of them outperformed everything else around last year.
If you want to give your clients differentiated outcomes and differentiate yourself in the process, I urge you to familiarize yourself with these new approaches to the classic portfolio. Each brings something different to the table.
Collectively, they're the future of asset management just as much as the TAMP platforms themselves are the future of how advice gets delivered. Portfolio and platform, strategy and system. They go together like apps in the app store.
Each integrates the aspects in different ways. I'm pleased to see the combination of Orion's technology with Brinker Capital's investment expertise create a new industry powerhouse. We'll be watching that $48 billion juggernaut closely in the coming year.
But to go back to the "app store" metaphor, I get that a once-a-year industry handbook is going to be obsolete almost the minute we publish it. In an accelerated world, you need to make sure you're looking at the right numbers.
That's why we've launched the Digital Dashboard. It updates live whenever the listed companies need to signal new developments: new strategies, new tools, a helpful blog post you might want to see.
The Dashboard also incorporates live contact links. Feel free to use them. Build relationships. It's what these companies do.
Trial By Fire
Last year was bumpy. The pandemic shut down wide segments of the economy and forced everyone to rethink the way they interact with the public. The boundaries of the office contracted as face-to-face meetings migrated online.
And that migration took place in the midst of the steepest market crash in over a decade. I thought we had finally put the 2008-9 trauma behind us, but by February we were once again calculating the trading curbs day by day for clarity on how far Wall Street could get in any given session.
I'm pleased to say the companies we list in America's Best TAMPs 2021 didn't even flinch. Their networks held up. Trades got executed. Models updated and risk limits were obeyed.
Customer service teams were already trained to operate online and remotely. This was always what these companies did, even before the pandemic shocks. Their whole value proposition revolves around virtual relationships and all-electronic transactions.
All the pandemic did was test their disaster plans and accelerate their growth trajectories. Many of these companies got so many onboarding requests from desperate and stranded advisors that they opened the doors wide.
If you took advantage of that opportunity, welcome aboard. And if you didn't, I know it's been an exhausting year. Now is the time to make sure the upheavals don't happen again.
Every advisor needs to operate as efficiently as possible. Last year proved how thin the margin of error is in this business.
Examine the "bundle" of tasks you think you're obligated to perform for your clients. You can outsource a lot of it.
Your clients won't mind. They're loyal to you, not your service bureau. But if you can provide better service, they don't care how you do it.
If you don't love an aspect of the job, let it go. For most advisors, that includes all or at least part of the portfolio. Use the time you spent picking stocks building stronger client relationships and prospecting for new ones.
I've seen surveys that advisors who shift to a TAMP approach . . . with virtually any platform . . . can claw back 8-9 hours a week. Serve more clients. Hold more virtual meetings.
Take the occasional weekend. It's up to you.
At this point, I just don't want you to get left behind. While a few names disappeared from the list in last year's turmoil, their assets were quickly absorbed into their stronger competitors.
We closed 2019 with a healthy $439 billion in AUM represented in America's Best TAMPs. We're opening 2021 with about $475 billion and a staggering amount of raw assets under administration.
Platforms returning from 2019 grew their AUM by an average of 22% in the pandemic year, beating the S&P 500 and everyone else in the industry. This is where the action is, the center of gravity.
It isn't the future any more. It's the status quo. You're either here, one way or another, or you're receding into the pre-pandemic past.
Want to see what you're missing? America's Best TAMPs 2021 is right HERE, ready for free download.
