ACAT Processing Time Reduced by 60% with Workflow Automation

ACAT Processing Time Reduced by 60% with Workflow Automation

Executive Summary

Whitfield Tax & Wealth, a rapidly growing RIA, struggled with lengthy ACAT processing times, impacting client onboarding and satisfaction. To address this, they implemented a workflow automation solution to streamline document preparation, submission, and tracking. This initiative reduced average ACAT processing time by 60%, leading to a smoother client onboarding experience and a 10% increase in client referrals.

The Challenge

Whitfield Tax & Wealth, managing over $350 million in assets, experienced a significant bottleneck in their new client onboarding process: the ACAT (Automated Customer Account Transfer) system. With a growing influx of new clients transferring assets from other firms, the manual ACAT process became increasingly burdensome, demanding significant staff time and often leading to frustrating delays.

Before implementing automation, the average ACAT transfer took approximately 28 days to complete. This involved manually completing forms, chasing signatures, and navigating the differing requirements of various custodians. Consider a scenario where a new client, John Smith, sought to transfer a $750,000 portfolio from a major brokerage firm to Whitfield Tax & Wealth. The delay of nearly a month meant John missed out on potential market gains during that period. For example, if the market increased by 2% during that time, he would have potentially missed out on $15,000 in gains.

Furthermore, the manual process was prone to errors. Data entry mistakes, missing information, and incorrect form submissions frequently led to rejected transfers, adding further delays and frustration for both clients and staff. It was estimated that approximately 15% of ACAT requests required at least one correction due to errors, adding an average of 5 days to the processing time. This also created compliance risks, as inaccuracies in account transfers could lead to regulatory scrutiny.

The extended onboarding time negatively impacted the client experience. New clients often expressed concerns about the lack of transparency and the perceived inefficiency. This was particularly detrimental during the initial stages of the client relationship when building trust and rapport is crucial. A negative onboarding experience could lead to clients questioning their decision to move their assets, and potentially impacting client retention. According to internal surveys, new clients rated the onboarding experience a 7 out of 10 on average, with the ACAT process being the most significant pain point.

Finally, the manual ACAT process consumed valuable time for Whitfield Tax & Wealth's team. Senior advisors and support staff spent an estimated 15-20 hours per week collectively managing ACAT transfers. This time could have been better spent on client relationship management, financial planning, and business development activities. This operational inefficiency translated into a lost opportunity cost, hindering the firm's ability to scale and grow.

The Approach

Whitfield Tax & Wealth recognized the need for a more efficient and streamlined ACAT process. They adopted a strategic approach focused on leveraging technology to automate key steps and improve transparency.

The first step involved a thorough analysis of the existing ACAT process. This included identifying the key pain points, mapping out the workflow, and quantifying the time and resources required for each step. This analysis highlighted the significant amount of manual data entry, the challenges of tracking the status of transfers, and the complexities of dealing with multiple custodians.

Next, Whitfield Tax & Wealth evaluated several ACAT automation platforms. They considered factors such as ease of integration with their existing CRM and portfolio management systems, the platform's ability to handle different types of accounts and custodians, and the level of customer support provided. After a rigorous evaluation, they selected a third-party ACAT automation platform that offered a comprehensive suite of features and seamless integration with DocuSign for electronic signatures.

The implementation process involved configuring the platform to align with Whitfield Tax & Wealth's specific workflow and compliance requirements. This included creating customized templates for ACAT forms, setting up automated notifications and alerts, and establishing security protocols to protect sensitive client data.

A key element of the approach was training the staff on how to use the new platform effectively. This included providing hands-on training sessions, developing user guides, and assigning dedicated support staff to answer questions and resolve any issues. The team also focused on promoting a culture of continuous improvement, encouraging staff to provide feedback and identify opportunities to further optimize the process.

To ensure a smooth transition, Whitfield Tax & Wealth implemented the automation platform in phases. They started by piloting the system with a small group of new clients and gradually expanded its use to all new transfers. This allowed them to identify and address any unforeseen challenges before implementing the platform firm-wide.

Finally, Whitfield Tax & Wealth established a system for tracking the performance of the new ACAT process. This included monitoring key metrics such as processing time, error rates, and client satisfaction. The firm used this data to continuously refine the process and ensure that it was delivering the desired results.

Technical Implementation

Whitfield Tax & Wealth implemented a third-party ACAT automation platform integrated with DocuSign to streamline the asset transfer process. The platform leveraged APIs to connect with custodial platforms and pre-populate ACAT forms with client data pulled directly from their CRM (Customer Relationship Management) system, reducing manual data entry and the risk of errors.

The technical workflow was designed as follows:

1. Data Import: Upon opening a new account, client data, including name, address, social security number, and current account details, was automatically imported from the CRM into the ACAT automation platform. The CRM data was verified using Plaid verification services.
2. Form Population: The platform automatically populated the necessary ACAT forms with the imported data, ensuring accuracy and consistency. The platform supported ACAT forms for various custodians, including Charles Schwab, Fidelity, TD Ameritrade, and Pershing. The platform algorithm also intelligently selected the correct forms based on asset type (e.g., brokerage account, retirement account).
3. Signature Collection: Once the forms were populated, the system automatically routed them to the client for electronic signature via DocuSign. The DocuSign integration ensured secure and legally binding signatures.
4. Submission to Custodians: Upon receiving the signed forms, the platform automatically submitted them to the appropriate custodians via secure electronic channels. The platform tracked the status of each submission and provided real-time updates. The data submitted conformed to industry-standard formats (e.g., XML, PDF).
5. Automated Tracking: The platform continuously monitored the status of each transfer, sending automated notifications to the client and the advisor at key milestones, such as submission receipt, asset verification, and transfer completion. The system also generated reports on key performance indicators, such as average processing time and error rates.
6. Error Handling: If a transfer was rejected by the custodian due to missing or incorrect information, the platform automatically notified the advisor and provided guidance on how to resolve the issue. The system also maintained a record of all rejected transfers and the reasons for rejection, allowing the firm to identify and address recurring issues.

Calculations were performed within the platform to monitor key performance indicators (KPIs). For example, the average ACAT processing time was calculated by averaging the time elapsed between the initial data import and the transfer completion date for all completed transfers during a given period. Error rates were calculated by dividing the number of rejected transfers by the total number of transfers submitted. The platform also tracked the number of hours saved by automating the ACAT process, based on the estimated time required to perform the same tasks manually.

Results & ROI

The implementation of workflow automation yielded significant improvements in Whitfield Tax & Wealth's ACAT processing efficiency and client satisfaction.

• Reduced ACAT Processing Time: The average ACAT processing time decreased from 28 days to 11 days, a reduction of 60%. This translates to a significantly faster onboarding experience for new clients.
• Decreased Error Rate: The error rate, measured as the percentage of rejected ACAT requests, decreased from 15% to 3%. This reduction in errors minimized delays and improved the overall efficiency of the process.
• Increased Client Satisfaction: Client satisfaction scores related to the onboarding experience improved from an average of 7 out of 10 to 9 out of 10. Clients praised the transparency, efficiency, and ease of the automated process.
• Increased Client Referrals: The firm experienced a 10% increase in client referrals following the implementation of automation. This suggests that the improved onboarding experience contributed to increased client loyalty and advocacy.
• Time Savings for Staff: The automation platform saved an estimated 15 hours per week for advisors and support staff. This freed up valuable time for higher-value activities, such as client relationship management and financial planning. The savings were calculated based on pre- and post-implementation time studies.
• Increased Assets Under Management: While not directly attributable solely to the ACAT automation, the firm experienced a 15% increase in assets under management in the year following implementation. The improved onboarding process likely contributed to this growth.
• Cost Savings: The reduced error rate and time savings translated into significant cost savings for the firm. While a full cost-benefit analysis is ongoing, the firm estimates that the automation platform will pay for itself within the first year.

For John Smith, the client from our earlier scenario, the transfer of his $750,000 portfolio was completed in 11 days instead of 28 days. This meant he missed significantly fewer market gains and had a much more positive onboarding experience.

Key Takeaways

1. Prioritize Automation for Onboarding: Automating manual processes like ACAT transfers can significantly improve efficiency, reduce errors, and enhance the client experience. Don't underestimate the power of streamlining these workflows.
2. Integrate Your Systems: Seamless integration between your CRM, portfolio management system, and ACAT automation platform is crucial for maximizing efficiency and minimizing data entry errors.
3. Focus on Transparency: Provide clients with real-time updates on the status of their transfers to build trust and manage expectations. Proactive communication can alleviate anxieties during the onboarding process.
4. Track and Measure Results: Continuously monitor key performance indicators (KPIs) such as processing time, error rates, and client satisfaction to identify areas for further improvement. Data-driven insights can help you optimize your processes and deliver better results.
5. Invest in Training: Ensure that your staff is properly trained on how to use the new automation platform effectively. Ongoing training and support are essential for maximizing the benefits of automation.

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