Firms believe ACATS are key for growth and client satisfaction

We heard from multiple veterans in clearing operations that ACATS experiences need to be flawless as they're often one of a client's first interactions with a firm. This applies to both individuals consolidating assets and advisors moving their book of business.

From our talks with many different clearing firms, the most common client complaints they get regarding transfers are slow transfer times (especially because clients cannot trade assets while they’re in transfer), too much paperwork, and a lack of visibility into where their assets are during transfers.

ACATS volumes are up significantly

The DTCC reported that ACATS now processes approximately 1.3 million transfers monthly, consisting of about 450,000 full transfers and 850,000 non-standard transfers. In 2023, $1.4 trillion in asset value was transferred, with both transfer and asset volumes up approximately 30% since 2021. ACATS is on track to transfer $1.6 trillion in assets this year.

ACATS modernization is approaching quickly

By October 2025, the DTCC plans to have all firms participating in ACATS transition to improved JSON messaging. Additionally, they aim to shorten the ACATS process by one day by Q3 2025 by eliminating the settle prep stage. This change, made possible by the move to T+1 trading, could allow full transfers to settle in as few as 2 business days after initiation, down from 3. Firms will need to upgrade their technology systems within the next year to accommodate these changes.

ACATS continues to evolve and improve in several areas. The system is exploring methods to expedite cash-only transfers, potentially reducing wait times for these transactions. By November of this year, ACATS will implement changes to support new account types required by the Secure 2.0 Act. Additionally, ACATS plans to automate mutual fund reclaims, with a target release set for next year.

Manual (non-ACAT) transfers remain a challenge

While ACATS processes an increasing number of account transfers, manual transfers are still common with firms not regulated by FINRA (e.g., banks, insurance companies, and trust companies). An ACATS leader at a large clearing firm noted that they receive manual transfers from over 7,000 institutions, many still using paper forms, mailed checks, and requiring wet signatures or medallion signature guarantees. Despite being fewer in number, non-ACATS transfers usually consume a disproportionate amount of resources and effort to process.

That being said, progress is being made in this area. For example, Fidelity partnered with Jackson National Life Insurance to process transfers electronically through the DTCC, which has been successful. They're now doing electronic deliveries to 10 firms and expect continued growth.

In a broader effort to modernize the transfer process, firms using ACATS, along with the DTCC and SIFMA, are actively encouraging banks to eliminate paper-based processes, including the use of paper checks.

Wrapping up

The landscape of account transfers is rapidly evolving, with ACATS modernization and the push for greater efficiency at the forefront. As the industry moves towards faster, more streamlined processes, firms must stay ahead of these changes to ensure smooth transitions for their clients. We thoroughly enjoyed attending the SIFMA Ops Conference and deeply value the opportunity to integrate more closely with the ACATS community. The insights gained and connections made at the conference will undoubtedly help shape our approach to these industry-wide changes. If you'd like to discuss ACATS, SIFMA, or need assistance with ACATS modernization, please don't hesitate to reach out. Our team is here to help you navigate these changes and optimize your transfer processes for the future.

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