As financial planning firms continue their search for scalability and efficiency, more and more firms are choosing to outsource various aspects of their business, retaining only the core areas where they provide the most value.
As a result, Turnkey Asset Management Programs (TAMPs) have exploded in recent years, as more and more planning firms outsource their investment process to focus on their financial planning services. However, a new option is beginning to emerge: the Turnkey Financial Planning Program (TFPP), designed to be a holistic one-stop shop for starting a financial planning practice.
As signaled by LPL’s recent announcement to acquire Veritat, one of the early TFPP platforms, building an effective TFPP can be a valuable business proposition itself, in addition to being an appealing offering for the growing financial planning firm.
In fact, arguably the TFPP is a glimpse at the broker-dealer of the future—a core offering for financial planning firms, once the other parts that are unnecessary for a financial planning practice are stripped out—and may also represent a way for RIAs to grow as well. So forget the TAMP—it’s time for the TFPP.
The inspiration for today’s blog post is the recent announcement that LPL has acquired Veritat, as an expansion of LPL’s efforts to help advisors reach the massive middle market largely unserved by financial planners. What’s interesting about the acquisition is not LPL’s involvement, per se, but the tacit acknowledgement in the deal that what Veritat brought to the table was a unique platform for doing financial planning for the mass market.
In point of fact, I believe this is just the front end of what will be a new trend and a new way to grow a financial planning practice—just as TAMPs have exploded in popularity over the past decade, in the next decade the real growth opportunity is the TFPP. Growing firms will want to affiliate with them, and financial planners will want to affiliate with them.
What Is a TFPP?