How did the idea for transfers come about?
Asset transfers continue to be unautomated across many parts of the world, resulting in a poor investor experience caused by delays, inefficiency and errors. Asset managers and distributors have lacked frictionless counterparty connectivity, being forced to use manually driven processes, operating across different market standards and messaging formats.
This has resulted in transfers becoming one of the most challenged parts of the fund lifecycle, meaning investors often have to wait several days or sometimes weeks to move their assets. This has had the knock-on effect of putting investors off moving their assets due to the complexity, ultimately giving them less agility when choosing providers. Some investors are even forced to liquidate their assets to move them, which can lead to tax charges and a loss of investment returns.
Because of the poor investor experience that has resulted from a lack of transfers automation, regulators and market practice groups have become increasingly focussed on ensuring that the asset management industry resolves this frictional area. At the same time, a number of our clients have approached us asking if we could bring our technology and skill in automation to help alleviate the problems caused by their existing way of working.
So how does it work?
Our transfers solution enables clients to transfer investor fund holdings at the portfolio and asset level straight to the investors’ new provider, completely digitally. We have full global connectivity regardless of messaging standards or protocols, and ensure that all transfers are market practice compliant with the relevant market standards. All of the information is available in real-time and can be consumed and viewed directly from the Calastone Network.
By automating and harmonising the different transfer processes and market standards, global asset managers and fund distributors are able to transact domestic and cross-border transfers without friction via one process.
Through one connection to Calastone, clients can start enabling fully digital asset transfers, reducing the time to process to less than one day, increasing transparency of the transfers’ status, reducing cost and creating a significantly improved investor experience.
What does automating transfers mean for the funds industry and the end investor?
Through automating transfers, we are reducing what has previously taken weeks into less than a day. This massively expediates and simplifies the process for an investor moving their assets, so that they can choose providers more quickly, more efficiently, and potentially at a lower cost. This enhances the investor experience and reinforces their trust in the asset managers and distributors that they choose, while improving competition between providers.
With customer experience increasingly becoming a focus for asset managers, distributors and regulators globally, Calastone Transfers is playing a vital role in ensuring that the industry can support and manage the investor experience that they expect. We already have a number of clients live on Calastone Transfers across the globe, and feedback so far has been extremely positive. The removal of manual processes for them has reduced errors and cost, enabling them to achieve operational alpha.
What is required to implement transfers?
Implementing Calastone Transfers is straightforward, all clients need to do is agree which formats and connectivity they would like to use, test their direct connection with us and then they will be up and running. They don’t need to be an existing client, through one connection they can start automating domestic or global transfers straight away.
How do you see the landscape for transfers developing in the future?
We are continuing to increase our ability to harmonise standards across additional markets, further enabling seamless cross-border transfers and expanding our coverage globally. We are live across Europe and Australia, with further regions in the pipeline.
As part of our efforts to automate asset and portfolio transfers, we are also working with clients to streamline the transmission of investor tax history information, alongside the transfer.