SMAs vs TAMPs: Understanding Your Portfolio Management Options

As a financial advisor, choosing the right portfolio management solution for your clients is critical. Two popular options dominate the landscape: Separately Managed Accounts (SMAs) and Turnkey Asset Management Platforms (TAMPs). Understanding the differences—and knowing when to use each—can transform your practice.

What Are Separately Managed Accounts (SMAs)?

Separately Managed Accounts (SMAs) are customized investment portfolios managed by professional money managers on behalf of individual investors. Unlike mutual funds or ETFs, SMAs offer direct ownership of securities, providing:

Key Benefits of SMAs:

• Personalization: Each account can be tailored to the client’s specific needs, tax situation, and preferences
• Tax Efficiency: Direct ownership allows for tax-loss harvesting and customized tax management strategies
• Transparency: Clients can see exactly what they own at all times
• Customization: Exclude specific stocks, sectors, or implement ESG preferences

Typical SMA Structure:

SMAs are typically offered by large financial institutions and asset managers who provide “model portfolios” that advisors can implement and customize for their clients. These models are built by portfolio managers with specific investment mandates—whether that’s large-cap growth, international equity, or sector-specific strategies.

What Are Turnkey Asset Management Platforms (TAMPs)?

Turnkey Asset Management Platforms (TAMPs) are comprehensive outsourced solutions that handle the entire investment management process for advisors. TAMPs go beyond just providing models—they offer:

Key Benefits of TAMPs:

• End-to-End Solutions: Trading, rebalancing, reporting, and custody all in one place
• Time Savings: Automate portfolio management tasks so you can focus on client relationships
• Research & Due Diligence: Access to institutional-grade research and strategy development
• Scalability: Efficiently manage growing AUM without proportionally increasing operational burden
• Compliance Support: Built-in compliance and regulatory reporting tools

The TAMP Value Proposition:

TAMPs are designed to help advisors scale their practices by outsourcing the time-consuming aspects of portfolio management. Rather than spending 40+ hours per week on research, trading, and rebalancing, advisors can leverage TAMP infrastructure to reclaim time for business development and client service.

The Challenge: Fees and Differentiation

While both SMAs and TAMPs offer compelling benefits, they come with challenges:

Traditional SMA Challenges:

• High Minimums: Many institutional SMAs require $100K-$500K+ per strategy
• Limited Customization: While personalization is possible, many SMA providers offer rigid model structures
• Implementation Burden: Advisors still need to handle trading, rebalancing, and ongoing management

Traditional TAMP Challenges:

• High Fees: Most TAMPs charge 25-50+ basis points, significantly impacting profitability
• Generic Strategies: Many TAMPs rely on traditional factor models that don’t differentiate
• Loss of Control: Some advisors feel they’re giving up too much control over the investment process

Comparing SMA Providers: Starting with Fidelity

To help you understand the SMA landscape, we’re building a comprehensive database of SMA offerings from major providers. Each SMA page includes:

• Investment approach and strategy details
• Management team and tenure
• Benchmark and holdings information
• Risk characteristics
• How SharpeMetrix compares

Fidelity Advisor Separately Managed Accounts

Fidelity offers a diverse suite of equity SMAs that leverage their 70+ years of investment management experience and 450+ research professionals. Their SMA lineup includes:

International Equity Strategies

• Fidelity Advisor International Capital Appreciation SMA
  MSCI ACWI ex-USA | 40-80 Holdings
  Combines high-quality, cyclical growth stocks with structural steady growers benefiting from long-term mega-trends.

• Fidelity Advisor International Growth SMA
  MSCI EAFE Growth | 40-80 Holdings
  Invests in companies with multiyear structural growth tailwinds and high barriers to entry at attractive valuations.

Sector Strategies

• Fidelity Advisor Health Care SMA
  MSCI U.S. IMI Health Care 25/50 | 40-80 Holdings
  Ranges from high-quality stable earners to innovative disruptors in the health care sector.

Domestic Equity Strategies

• Fidelity Advisor Growth Opportunities SMA
  Russell 1000 Growth | 40-80 Holdings
  Focuses on companies with resilient business models trading at attractive valuations relative to long-term earnings potential.

• Fidelity Advisor Large Cap Opportunities SMA
  S&P 500 | 70-100 Holdings
  High-conviction ideas selected from across Fidelity’s U.S. large-cap spectrum.

• Fidelity Advisor Small Company SMA
  Russell 2000 | 60-100 Holdings
  Small-cap stocks with superior growth potential and strong financial characteristics at attractive valuations.

Making the Right Choice for Your Practice

The choice between SMAs, TAMPs, or a hybrid approach depends on your practice’s unique needs:

Choose Traditional SMAs if:

• You have clients with complex tax situations requiring heavy customization
• You want maximum control over individual holdings
• You have the infrastructure to handle trading and rebalancing in-house
• Your clients meet high account minimums

Choose a TAMP like SharpeMetrix if:

• You want to scale your practice efficiently
• You need institutional-quality research without building it in-house
• You’re looking for differentiated strategies beyond generic factor models
• You want to maintain healthy profit margins with flat-fee pricing
• You value transparency and systematic, rules-based approaches

The Bottom Line

Both SMAs and TAMPs have their place in a modern advisory practice. The key is understanding what your clients need, what your practice can efficiently deliver, and where to find partners who can fill the gaps.

SharpeMetrix bridges the best of both worlds: the differentiation and sophistication of institutional SMAs with the efficiency and scalability of a TAMP—all at a flat fee that protects your profitability.

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