Turnkey asset management programs are growing rapidly and appear to be generating more income for the advisors who use them, according to a new report.
The study by Tiburon Strategic Advisors found that the TAMPs market now comprises about $193 billion in assets under management, led by Prudential Investments with $44 billion. The other dominant players in the market are SEI Investments and AdvisorPort, according to the report.
These companies "have distanced themselves from their competitors in the TAMP market," according to the report, while adding the market has recently experienced consolidation.
The report found that 80% of advisors who use TAMPs earn net incomes of more than $100,000, while only 60% of advisors who do not use the programs achieve that benchmark.
On a broader level, the report found that the fee-accounts market should reach nearly $3 trillion in assets under management by 2010, and that the number of separately managed accounts has grown to three million, up 50% since 2001.
"After slowing with the depressed markets in 2000-2002, assets in separately managed accounts began to grow again in 2003, and have now reached over $600 billion," the report says.
The SMA industry expects that 40% of its net flows will be coming from IRA rollovers by 2008, up from the current 25%, according to the report. Total SMA assets are expected to reach $2 trillion in 2010.