America’s Best TAMPs Showcase - Flipbook - Page 15
2026 AMERICA’S BEST TAMPS
to optimize for individual clients, a
meaningful improvement over simply
placing everyone into a single multiasset pool.
Third-party models take this further,
allowing advisors to responsibly hand
off investment management to outside
experts. Like mutual funds or SMAs,
some models focus on a single asset
class. Most, however, combine multiple
assets to generate income or maximize
after-tax returns across a diversified
structure.
As fund selectors work to keep pace
with a changing landscape and shifting
client priorities, more are turning to
models as a flexible and scalable
solution. The direction of the industry
is clear.
Model portfolios are also emerging
as a practical entry point for advisors
hesitant to engage with sustainable
investing. Among those who are
engaging, models are the vehicle
of choice, offering a lower-friction
way to participate in the market and
avoid unacceptable holdings without
rebuilding their entire investment
approach.
A MARKETPLACE OF MODELS
Models are the software to the TAMP’s
hardware. They provide a blueprint for
asset allocation and fund selection,
without being a distribution system in
their own right.
That distinction gives advisors
meaningful discretion. Underlying
fund selection, rebalancing, tactical
allocations, and customization for
individual clients all remain within the
advisor’s control.
Models aren’t tradable securities.
There’s no ticker symbol, and you can’t
purchase one through a brokerage.
They’re essentially a documented
blueprint of what the manager is doing
and intends to keep doing over time.
Models from larger fund companies
like BlackRock and Invesco are
often provided at no direct cost.
The compensation comes through
fees embedded in the underlying
holdings, typically a mix of roughly
70% proprietary funds and 30% openarchitecture ideas from outside or
boutique managers.
The fee advantage over traditional
mutual funds is real and worth
communicating to clients. As ETF
adoption has grown, so has interest
in model portfolios, particularly those
offered by fund companies that don’t
charge a front-end fee. For costconscious clients, the entry point can be
very low.
HOW TAMPS GET MODELS TO YOU
Of course pivoting your practice to offer
model portfolios, SMAs, and UMAs
through a TAMP requires real up-front
work. But the payoff is tangible. These
account structures resonate with
wealthier, more sophisticated clients,
and that alone can sharpen your
competitive position considerably.
The role shift is worth understanding
clearly. You become the coach
setting the overall financial game
plan, while the investments execute
their designated roles. That’s a more
defensible and more scalable position
than one built on personally managing
every portfolio decision.
Technology integration is another
concrete benefit. TAMPs invest heavily
in supporting the operational side of
the transition, helping firms connect
their existing custodial, compliance,
and workflow systems to the platform.
15
TM
Model portfolios
are also
emerging as
a practical
entry point for
advisors hesitant
to engage with
sustainable
investing.
Many also allow advisors to run their
practice on the TAMP’s own technology
infrastructure, which can bring
meaningful efficiency to back-office and
compliance operations without requiring
a separate buildout.
The fee picture can also surprise
advisors who haven’t run the numbers.
Even when you add the TAMP’s
platform fee to the management fees for
each SMA or model manager, the total
cost to the client is often lower than
what they were paying in combined
expense ratios on a portfolio of actively
managed mutual funds. That’s a
straightforward conversation to have,
and clients tend to respond well to it.
WHAT ABOUT THE “WRAP?”
The actively managed mutual fund wrap
account may be the first casualty of the
client-centric TAMP model. Embedded
fees run relatively high, asset class
flexibility is limited, and the cost burden
meaningfully reduces the probability of
delivering positive net returns to clients.
As both advisors and investors grow
more fee-conscious, mutual fund wraps
will likely continue to lose ground.
