This may sound sacrilegious for a planner, but Ill admit it: Im not a big fan of investment management. I do, however, have a passion for financial planning and helping people implement financial changes. So when I launched my firm, I decided to use a TAMP (Turnkey Asset Management Program) calledAsset Dedicationto handle most of the advanced investment management for me.
Even before I launchedFinance for Teachers, I knew I would outsource the investment management piece of my business. But I didnt realize how many vendors there were catering to this need -- nor the variety of investing approaches they all took.
After some research and a few interviews, I chose Asset Dedication, because their philosophy on investing was very similar to mine and their pricing was hard to beat.
IMPACT ON CLIENTS
So what does this mean for my clients? For one thing, the TAMP offering doesnt affect all of them. As part of my annual retainer fee, I build basic ETF portfolios and rebalance them at each 12-month review.
Clients who do want more hands-on investment management, however, can pay extra to use the TAMP and get access to its portfolio options, which include DFA funds. They pay an asset-management fee for the TAMP -- roughly 0.25% to 0.35% per year -- as well as an increased retainer that covers my additional time and access to the program. I then work with Asset Dedication to build a custom portfolio based around their plan, and Asset Dedication will then rebalance the portfolio and provide performance reporting, and other services.
IMPACT ON ADVISORS
Im happy no matter which option they choose. I am happy to build basic portfolios for every client -- I simply see that as part of my job. If clients choose to use Asset Dedication, then my scope of work changes as it relates to investments, but my income goes up as well.
I may make changes to this plan over time, but I will not being doing hands-on investment management any time soon.
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