(Flexible Plan) It is probably safe to say that many readers of this article are not totally familiar with the concept of a TAMP (a turnkey asset management program).
And there is also a pretty good chance that many do not know that Flexible Plan Investments (FPI) has been serving financial advisers and their clients as a TAMP for over 25 years.
An article at The Wealth Advisor pointed out that based on an industry poll, “66% of advisors don’t understand TAMPs.” The article went on to explain “why advisors can’t afford to ignore this growth industry.”
Despite the amount of publicity around TAMPs in recent years, the significant differences in the offerings by various TAMPs have likely led to some confusion for both advisers and investors.
What exactly is a TAMP?
An article by Grier Rubeling, principal at Advisor Transition Services, addressed this issue. Despite being a seasoned advisory industry professional, she was having some difficulty in fully articulating the concept of a TAMP.
Rubeling found the definition offered by a business-development representative for a TAMP to be “simple, concise, and easy to understand.”
His answer? “A TAMP is a platform where an advisor can easily access suitability, investment management, and trading tools.”
The Wealth Advisor provides their take on the growing TAMP segment of the investment industry:
“TAMPs (or turnkey asset management programs) are fee-based technology innovations that help financial professionals optimize their clients’ returns.
“This allows advisors to outsource the heavy load of investment management and compliance—so they are able to spend more time building stronger relationships with clients. ...”
The benefits of TAMPs for advisers and their clients
TAMPs provide many benefits, both in terms of access to sophisticated investment management solutions and in improved efficiencies for advisers’ practice management.
As advisers take advantage of a TAMP’s capabilities in research, strategy development, technology/systems/reporting, transparency, and investment implementation, they gain the ability to devote more time to the overall financial-planning objectives of their clients. According to a 2022 study, 99% of advisers who outsource investment management say they would recommend it to other advisers. The same study reports that four out of five advisers who outsource plan to increase their share of assets in the next three years.
A study published by The Wealth Advisor illustrates how outsourcing investment management can “elevate” a financial adviser’s or wealth manager’s value proposition for clients and prospects.
FPI’s offerings as a TAMP
FPI maintains dozens of different dynamically risk-managed strategies (both fully proprietary and subadvised) for mutual funds, ETFs, and variable annuities. FPI has agreements with over 600 broker-dealer and RIA firms nationally, managing SMAs, participant self-directed brokerage accounts, and group retirement plans. FPI was recognized by Morningstar for the 2023 top-performing tactical-allocation fund for the Quantified STF Fund (QSTFX)* and has been recognized over the years with many other significant industry awards.
Insights from FPI’s founder and president, Jerry Wagner
As part of FPI’s celebration last year of the 25th anniversary of its TAMP, Strategic Solutions, Jerry Wagner reflected on FPI’s history—and innovations—as a TAMP:
“When we launched Strategic Solutions in 1998, the financial-planning industry was shifting away from traditional wirehouses and commission-based products toward a more independent approach. We recognized that financial advisers needed a TAMP that would give them the ability to easily create powerful, customized investment portfolios with multi-strategy diversification and dynamic risk management within a single account, and Strategic Solutions was born. Since then, we have continued to enhance and align our products and services to suit the ever-evolving needs of our financial adviser partners and their clients.”
Pioneering risk-managed wealth management
Since its inception, FPI’s Strategic Solutions has introduced several groundbreaking products and services to the financial-planning industry, including the following:
• Multi-strategy diversification in a single account: “Diversification isn’t just a buzzword for us; it’s a guiding principle. We believe true diversification starts with building portfolios of multiple uncorrelated strategies—not just asset classes—to help better manage risk,” said Wagner.
• Risk-managed principled-investing strategies that help investors give back: “FPI was quick to identify and respond to the growing demand for principled-investing solutions, launching our For A Better World investment strategy in the late 1990s, and later our Faith Focused Investing strategy. Both are suitability-based, employ the dynamic risk management we apply to all of our investment strategies, and offer the ability to give back 10% of our net advisory fees collected for these strategies to a qualified charity of the investor’s choice through our Give Back Program,” explained Wagner. In addition, FPI launched the QFC Common Ground strategy, which was developed to invest in common stocks and bonds of issuers that can be considered compliant with both ESG (environmental, social, and governance) and BRI (biblically responsible investing) standards.
• Powerful investment solutions for everyday investors: “At FPI, we constantly strive to equip financial advisers with a diverse set of investment tools to help them meet their clients’ unique needs. Among our wide array of innovative investment solutions are our QFC turnkey portfolios. To navigate the risk that exists in each market environment, investors need a portfolio that can continuously respond to market changes with several defensive tools—aiming not only to smooth out market volatility but also to seek opportunities for growth,” said Wagner.
• Customized benchmarks to track investment performance: “True benchmarking is about determining if you’re on course to reach your goal, not whether you measure up to an arbitrary index,” said Wagner. “Our OnTarget Investing process, which is based on the financial goals and time horizons set by the client at the beginning of our investing relationship, was developed and refined over time to help investors define realistic goals and set appropriate benchmarks.”
• Optimized charitable giving using donor-advised funds: “One of the most beneficial—and tax-efficient—ways to make charitable donations is through a donor-advised fund,” notes Wagner. “But many of these programs come with high fees and might not offer investors access to the risk-managed investment strategies needed to maximize the potential of their giving account. We created FPI Charitable to offer investors an easy, tax-smart, low-fee, and risk-managed option to build a legacy of giving over time.”
• First-of-its-kind access to managed futures in a “40 Act fund”: FPI’s QFC Managed Futures strategy provides financial advisers and everyday investors with unprecedented access to managed futures in a registered mutual fund format. The strategy leverages the expertise of Eckhardt Trading Company’s global futures approach, designed to capture trends and manage risk across diverse markets. Additionally, as a Quantified Fee Credit (QFC) strategy, it offers two layers of dynamic risk management and affiliated fund fee credits that reduce the FPI portion of the advisory fee to as low as 0%, depending on the account size and the platform used.
Helping advisers and investors navigate the complex landscape of asset management—now and in the future
FPI’s commitment to growth and innovation shows no signs of slowing down. Looking forward, the firm plans to continue enhancing its platform and portfolio-analysis tools based on adviser and investor needs.
FPI has also broadened access to its dynamically risk-managed strategies by making them available on other well-known TAMPs, including Envestnet, SMArtX, FMAX, Orion, Adhesion, Axiom, Amplify, and Axos MMX.
“FPI is constantly exploring new and better ways to reach investment success. You can’t navigate multiple market environments without being flexible and innovative,” said Wagner. “Our unwavering commitment to adaptability and ingenuity has defined us over the more than 40-year history of our firm, and it will continue to drive our future. We are steadfast in our mission to empower financial advisers and investors with cutting-edge strategies that bring high-level investing to everyone. We’re more excited than ever to find ways to make wealth management easier and more effective for all.”
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* The Morningstar award was given by Morningstar on January 17, 2024 (for 2023 based on Morningstar fund data as of December 31, 2023). Quantified STF Fund (QSTFX) was rated against the following numbers of U.S. Tactical Allocation funds over the following time periods: 222 funds overall, 222 funds in the last three years, and 206 funds in the last five years. With respect to these Tactical Allocation funds, Quantified STF Fund received a 5-star rating overall, 4 stars for three years and 5 stars for five years. No fee was paid in connection with this award.
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