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Both outsource investment management, and they are built for entirely different kinds of firm. Choosing wrong is usually a scale mistake, not a strategy one.
The comparison gets muddled because both arrangements outsource investment management. The difference is what else comes with it, and who the arrangement is designed to serve.
| TAMP | OCIO | |
|---|---|---|
| Built for | Advisory firms serving retail households | Institutions, foundations, endowments, large pools |
| Scope | Models, trading, often reporting and billing | Investment policy, manager selection, asset allocation |
| Who owns the client | You do | You do, but the mandate is theirs to shape |
| Typical unit | The household | The portfolio |
| What is left with you | Relationship, planning, discretion | Governance and oversight |
An OCIO arrangement priced and structured for a foundation rarely fits a firm running three hundred households, because the work is shaped differently: many small accounts, frequent cash needs, tax lots, household-level reporting. A TAMP built for that shape handles it as routine. An OCIO treats each of those as an exception.
The reverse is also true. A single large pool with a governance committee does not need household rebalancing; it needs an investment policy statement and someone accountable to it.
Keeping it in house is a real choice, and for some firms the right one. It is worth costing honestly: the software, the seat licences, the reconciliation hours, and the fact that the person doing it is usually the person who should be in front of clients. Firms that do this well have staff for it. Firms that do it badly have a spreadsheet and a Sunday.
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