Model Portfolio & SMA Strategists Showcase - Flipbook - Page 15
SMAs & MODEL PORTFOLIOS
QUICK MATH
Where the fee
stack hides
Fund expense ratio, plus manager fee,
plus TAMP platform fee, plus overlay fee if
applicable. Each one is reasonable alone,
and each one is invisible on its own line
item. Add them, and the “low-cost” model
can quietly cost more than the mutual
fund portfolio it replaced. Always ask for
the stacked total, never the pieces.
$176.8 trillion for 73.7 million clients as
assets surged 22% in a single year),
the operational burden of servicing
that scale has pushed a much larger
share of the industry toward outsourced
platforms almost by necessity.
The market itself is moderately
concentrated at the top. Envestnet,
SEI, AssetMark, and Orion Portfolio
Solutions are among the names that
show up most often across advisor
surveys, but the space also includes
a long tail of smaller, more specialized
platforms, some built around a
particular custodian relationship, some
around a particular niche like taxmanaged direct indexing or alternatives
access. Bigger isn’t automatically
better here. It usually just means
broader model shelf space and more
mature integrations.
EVALUATING A TAMP’S SERVICE
QUALITY, NOT JUST ITS MODEL
SHELF
Most advisors evaluate a TAMP by
browsing its available models and
checking its platform fee. Fewer ask
about operational service quality
directly, even though that’s what
determines whether the platform is
pleasant or miserable to actually use
once a practice is running on it. Two
concrete metrics worth asking any
TAMP for directly are their NIGO rate,
the percentage of submitted paperwork
or trade requests that come back “not
in good order” and have to be redone,
and their client retention rate.
A platform with a high NIGO rate
translates directly into advisor time lost
to rework and client accounts that sit in
limbo during onboarding or transitions.
Some leading platforms publish figures
near 95% retention and under 2%
NIGO as a competitive differentiator.
A TAMP that can’t or won’t produce
comparable numbers on request hasn’t
necessarily failed the test, but it’s worth
noting that this data exists and is being
tracked somewhere internally even
when it isn’t volunteered.
WHAT A TAMP ACTUALLY
SOLVES, AND WHAT IT DOESN’T
The strongest case for a TAMP is
integration. Rather than negotiating
separate relationships with a
custodian, a portfolio accounting
system, a billing system, and each
individual model provider, an advisor
gets one platform that’s already wired
all of that together. For a smaller or
TAMP Adoption
Among Advisors
45%
10%
~10 years ago
Today
Source: Dakota, “Turnkey Asset Management
Platforms: The Evolving Landscape” (2026)
15
newly independent practice, that can
collapse months of operational buildout into a matter of weeks.
The trade-off, and it’s a real one, is a
layer of fees stacked on top of whatever
the underlying model providers already
charge. A TAMP’s platform fee sits
alongside the manager fees for each
SMA or model in use, and depending
on how those layers combine, the
effective all-in cost to the client can end
up higher than advertised if nobody’s
doing the arithmetic across the full
stack. The practice checklist near
the end of this guide (p. 45) covers
exactly how to audit that math before
committing to a platform.
There’s a less visible layer worth
knowing about specifically for boutique
and custom-SMA managers. Some
TAMPs charge the asset manager
itself a due-diligence fee for the
right to offer custom SMA or directindexing strategies on the platform,
sometimes scaled by account count.
That cost doesn’t show up on a client’s
statement, but it’s a real business
cost the manager is carrying, and
it can factor into why a boutique
manager’s fee is what it is, or why a
smaller manager chooses not to offer
a custom or direct-indexed version of
their strategy on a given platform at all.
Worth keeping in mind the next time
a boutique manager’s pricing seems
higher than a comparable off-the-shelf
model’s. Part of the gap may be a
platform cost the manager is absorbing
that never gets itemized for the advisor
or client to see.
The other limitation worth naming
plainly is that a TAMP does not replace
investment judgment. It streamlines
execution of decisions that still have
to be made (which providers, which
models, which structure for which
client) by the advisor. TAMPs take
