By Jonathan Rogers

For RIAs who are working to scale their businesses for greater profitability, the decision to use a turnkey asset management platform (TAMP) is typically a vital strategic inflection point. After all, time spent with clients or prospective clients is your most valuable resource, and a properly integrated TAMP can do more than almost anything else to free up time for you to focus on what matters most — building your client base and AUM as an independent practitioner. But the choices associated with using a TAMP, though crucially important, are not simple. Having recently built a TAMP while scaling our own business, I found it useful to break the decision process down into a three-point framework while also considering a few potential pitfalls that should be avoided.

Decision Point #1: Do you want technology or people operating the technology?

The first degree of outsourcing is often choosing more-and-more sophisticated technology stack for your independent RIA. As an example, I often see RIAs graduate from off-the-shelf CRM technologies like HubSpot or ZOHO to industry-specific CRMs like Redtail or Junxure and eventually into more sophisticated CRMs for integrated workflows like a customized Salesforce solution. This progression makes sense, but each level is not necessarily “more efficient” inherently. Each level yields greater consistency, more diligence in follow-up and better record keeping. These are critical for a good client experience as an advisor grows from the first 50 clients to serving 100 personally and eventually moving to a team service model involving multiple team members and several hundred clients. Along the way, different things become important: data flow between systems, more efficient paperwork processes or segmentation of employee access to limit the risk of data breaches.

This progression should happen and is necessary, but each level of CRM actually gets more complicated: more settings to manage, more fields to update and more connections to other systems to build — and troubleshoot. This microcosm is replicated across trading, reporting, and billing. Inevitably, as we scale, the problem of customized models or reporting for our “extra special” clients only becomes more cumbersome to maintain as the client base grows.

TAMPs step in along this path, both because they often have already built out every nook and cranny of their CRM or trading software and because they have specialized personnel. The billing specialist knows instantly how to handle the special request of one client who wants to bill the kids’ accounts from their brokerage. The trading team is the one spending 20 minutes looking at model deviation and tax ramifications to figure out how best to trade a portfolio to balance capital gains with asset location preference.

This time becomes the more valuable part of any TAMP solution but is often the element that is hardest to evaluate. My recommendation would be to take examples like this and walk through how you would communicate the request and deal with exceptions. If the potential TAMP has you looking at software to figure out what trades to execute, that is a big red flag.

Decision Point #2: Do you deliver the most value across many families or perfection to a few?

I often see independent RIAs struggle with the idea of relinquishing control. While there are exceptional control freaks, I find that more often this comes from a place of caring so deeply about the people we are serving that we demand perfection in our service to them. This is not necessarily a bad thing, but it can also limit how much good we can do. Remember the saying, “Don’t let the perfect become the enemy of the good.”

As an owner, you can control every button and knob. Yes, you probably could do a slightly better job because you know the client better, but that hour of your time is an hour not allocated to solving the next client’s major financial planning challenges.

If you require perfection, you may not be able to let go of even the mundane processes, restricting the number of clients you can serve. Advisors rarely step back to consider that their perfectionism may reduce the aggregate good they can do in this world. More selfishly, perfectionism not only limits the value you create, but that value is intrinsically linked to how much revenue you can bill.

Which do you care more about? If it is perfection for a small number of clients, that is fine, but recognize that and set up referral partners for the clients you won’t be able to serve.

Decision Point #3: Should I hire or should I outsource?

In my experience, hiring does not improve the perfection quotient. You spend a lot of time getting that fairly green hire familiar with how you want to trade, versus a TAMP employee who is well-trained and who likely has multiple employees with initial training on simple cases and after years graduated to handling the most complex cases.

If you want to gain any efficiency, you have to have a tough coaching conversation with yourself about committing to a path that gets you to a better place — one that requires you to let go of some things that you are uncomfortable putting in another’s hands.

Too often, hiring is the quick-fix answer to not truly letting go of the mundane. Do not let that be your reason to hire. The right reason is to improve the client experience with your firm. One of the first hires is often a wonderful people-person who is also magically detail-oriented enough to handle the paperwork. This person can get to know your clients almost better than you do and provide an important complement to you, especially if you are more stoic. Alternatively, I do not object to hiring a person as a next-generation advisor — your eventual successor. My only cautionary note is that I see this fail too often, typically because of a mismatch in expectations. The next-generation person is hired to do paperwork and plan entry with the belief that they will learn how to become an advisor, but at the appropriate time, the owner does not give them lead advisor responsibilities or upside/time for developing their own small client base.

There are many solid reasons for outsourcing to a TAMP, but the keys to an effective implementation are understanding yourself, having clarity on your goals and having realistic expectations for both the process and the outcomes. Properly utilized, a TAMP can be your most important stepping-stone to next-level growth. Just make sure that your reasons match up with your understanding of what the TAMP is intended to do.

We help advisors establish and grow successful wealth management practices. To learn more about how we can help you amplify your life’s work, contact us at You can follow us on Twitter@theWAAlliance and on LinkedIn.

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