AssetMark, one of the largest turnkey asset management platforms, has built a new suite of services specifically for RIAs with the goal of capitalizing on the fastest-growing type of wealth manager.
Dubbed AssetMark Institutional, the TAMP’s “fully-assembled” service provides RIAs investment management services, operational support, technology, and consulting — all components now effectively expected of platforms catering to those wealth managers.
“What we noticed is that RIAs’ businesses were changing and they had needs that were unique to them. And what we wanted to do was build out an offering that meets the specific needs of the RIA,” AssetMark CEO Natalie Wolfsen told RIA Intel.
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AssetMark (ticker: AMK), which managed $74 billion for wealth managers at the end of 2020, has long worked with RIAs but most of its customers are broker-dealers. Advisors working for both types of businesses need most of the same services. However, the TAMP sees opportunity to improve them by segmenting its business offerings, especially those for RIAs. “The growth of hybrid RIAs and independent RIAs over the last 10 years has outpaced other channels in both adviser headcount and adviser managed asset growth,” Wolfsen said.
AssetMark Institutional will provide RIAs portfolio management, reporting, proposal systems, and billing. The new service will integrate with multiple custodians and has its own investor portal where clients can access resources and check out their portfolios.
A key new feature of AssetMark Institutional is that RIAs will have the flexibility to manage client portfolios, outsource their portfolio management using the TAMP, or use a combination of those approaches. Advisors often want to continue managing investments for certain clients, maintain control over an asset class they have experience in, or simply don’t want to outsource all of their investment management at once for tax reasons. Wolfsen said the flexibility was “critical” to successfully serve RIAs.
Like other RIA platforms, AssetMark Institutional will also offer business consulting and practice management resources to help RIAs become more efficient, improve their strategy, and better serve clients. AssetMark also curates events and creates ways for its community of wealth managers to share and leverage their own experiences and practice management advice.
Existing RIA clients will become part of AssetMark Institutional and their service will improve as a result, Wolfsen said. The new platform will launch with 350 RIAs and over $7 billion.
Wolfsen, who took over as CEO last week, did not share any specific expectations for AssetMark Institutional’s growth but it is an important part of the company’s strategy, she said. It will have its own salesforce specializing in the needs of RIAs, with longer sales cycles due to the nature of convincing RIAs to switch comprehensive platforms that power their businesses, she added.
But Wolfsen is confident AssetMark Institutional can compete against Envestnet, Dynasty, Focus Financial Partners, and other service providers to RIAs.
“We definitely think this puts wind at our back,” she said.
Earlier this month, AssetMark also acquired its own financial planning software firm Voyant, a Texas-based company with only one client in the U.S. but a growing business internationally. The plan is for Voyant to remain an independent subsidiary, but integrate it into AssetMark’s services and grow the financial planning software firm’s presence in the U.S.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.