Specialised Solutions for Financial Advisers’ AML/CFT Management

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CFT), and fraud prevention solutions for financial advisers’ anti-money laundering compliance that are tailored to applicable AML/CTF (aka CTF) laws, regulations, AML/CTF supervisors' guidance for the financial advice sector, sector-specific red flags and indicators, to help your business meet applicable obligations that cover financial planners’ money laundering and terrorist financing risk mitigation, fraud prevention, the detection and handling of other types of financial crime.

We have designed our AML solutions to help you navigate the complexities of the AML requirements for financial advice providers in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of financial advisers’ AML/CFT compliance, including but not limited to:

• Business Profile and Strategic Factors:
• Your commercial objectives
• Your products
• The size and structure of your business
• Your available AML/CTF compliance technology and resourcing
• Your risk appetite for AML/CTF-related risks
• Your governance framework and reporting lines
• Your client demographics
•  Your countries of operation

 

• Applicable Regulatory and Fraud Prevention Obligations:
• AML/CTF regulations for financial advisers
• Any financial advisers’ fraud prevention obligations or expectations your business may be subject to
• Any related compliance obligations, including, but not limited to, financial advisers’ obligations under:

• Privacy laws
• Financial market laws
• Fair trading laws
• Financial licensing requirements
• Other relevant regulatory frameworks

• Operational AML/CTF Compliance Requirements:

• Money laundering and terrorist financing (ML/TF) risk assessment
• AML risk management
• Customer due diligence (CDD) and Know Your Customer (KYC) obligations for financial advisers
• Enhanced customer due diligence
• Ongoing customer due diligence and transaction monitoring
• PEP identification and sanctions compliance
• Staff vetting and AML/CTF training
• Ad-hoc and periodic reporting
• Other obligations relating to financial advisers’ anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

What Jurisdictions Do Our Financial Advisers’ AML Solutions Cover?

• Financial Advisers’ AML Solutions in Australia: Financial advisers’ AML requirements in Australia are outlined under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, with supervision by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
• Financial Advisers’ AML Solutions in New Zealand: Financial advisers’ AML obligations in New Zealand are governed by the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, supervised by the Financial Markets Authority (FMA).
• Financial Advisers’ AML Solutions in the United Kingdom: Financial advisers’ anti-money laundering requirements in the United Kingdom are specified under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, and their subsequent amendments, with oversight by the Financial Conduct Authority (FCA).
• Financial Advisers’ AML Solutions in the United States: Financial advisers’ AML obligations in the United States are mandated under the Bank Secrecy Act (BSA) and the USA PATRIOT Act, with regulations enforced by the Financial Crimes Enforcement Network (FinCEN). Additionally, state-level money transmitter laws may apply.
• Financial Advisers’ AML Solutions in the European Union: Financial advisers’ AML compliance across the European Union follows the Sixth Anti-Money Laundering Directive (AMLD6) and national laws and regulations, with oversight by the European Banking Authority (EBA) and National Competent Authorities (NCAs).
• Financial Advisers’ AML Solutions in Singapore: Financial advisers’ AML requirements in Singapore are outlined under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, the Terrorism (Suppression of Financing) Act, and guidelines issued by the Monetary Authority of Singapore (MAS).

 

 

Which Types of Financial Advisers Do We Support?

Focusing on financial planners’ money laundering (ML), terrorism financing mitigation (TF), and fraud prevention, our AML solutions for financial advisers cover the following types of financial advisory service providers and institutions that are deemed to be AML/CTF reporting entities (aka “designated service providers” or “obliged entities”):

• Independent Financial Advisers
• Wealth Management Advisors
• Retirement Planning Consultants
• Estate Planning Specialists
• Investment Advisory Firms
• Financial Planners
• Estate Planning Specialists
• Certified Financial Planners (CFP)
• Tax Advisors
• Insurance Advisors
• Mortgage Advisers
• Investment Strategists
• Robo-Advisers
• Other financial advisers that are subject to financial advisers’ AML requirements

 

Financial Advisers’ AML Advisory and Support

Our AML/CFT advisory services for financial advisers include, but are not limited to, the following:

• Detailed AML/CTF compliance advice: Tailored to the AML requirements for financial advice for different processes, including but not limited to customer due diligence (CDD), transaction risk scoring, transaction monitoring, customer onboarding and know-your-customer (KYC) analysis, and other AML processes. Also tailored to the specific money laundering and terrorist financing (ML/TF) risks involved in these processes, helping you with effective ML/TF risk management
• Financial advisers’ fraud risk management advice: Advising on measures, controls, and processes for detecting, preventing, and responding to different types of fraud, scams, and other types of financial crime relevant to financial advisers. Also, tailored to financial advisers’ fraud environment, risk management practices, and stakeholders’ expectations and obligations (banks, regulators, insurers, shareholders, etc.).
• Banking relationships advice: Advising financial advice providers on AML/CTF issues related to maintaining and expanding their banking relationships, complying with banks’ AML/CTF risk appetite standards, recall procedures and expectations, and other operational requirements.
• Operational AML/CTF advice: Advising support and KYC teams on day-to-day onboarding, support queue management processes, allocating AML/CFT resources effectively, and making operational improvements to enhance overall customer experience and AML compliance efficiency.
• Specific matter advice (difficult clients, high ML/TF risk matters, customer due diligence for high-net-worth clients, complex transactions and more): Advising on handling specific AML/CTF issues related to clients and complex and unusual transactions, including assessing the adequacy of Sources of Wealth (SOW) or Source of Funds (SOF) information and documentation for specific enhanced due diligence (EDD) cases.
• Peer benchmarking and best practices: Helping financial advisers compare their AML/CFT practices with industry standards, AML/CTF supervisor guidance, and internationally recognised best practices set up by international organisations like the Financial Action Task Force (FATF) for complying with financial advisers’ AML/CFT obligations.
• Government agencies liaison advice: Advising senior management and compliance teams on handling relationships with external bodies, including AML/CTF supervisors and law enforcement agencies, such as the FIU or its local equivalents.
• AML/CFT audit advice: Advising senior management and compliance teams on matters related to the statutory AML/CFT audits, including auditors’ guidelines, requirements, AML/CFT audit process, and obligations related to the audit’s outcome, tailored to both generic financial advisers’ anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help financial advisers to effectively navigate situations involving an AML/CFT breach, warning, or investigation. The cost of non-compliance can result in significant regulatory fines and penalties, as well as irreparable reputational damage. Therefore, when you are on your supervisor’s radar, it’s essential to have AML/CFT advisors who know how to set things right and effectively engage with AML/CFT supervisors and other stakeholders. For more details, please visit our Remediation Solutions page.
• Further information: You can visit our AML advisory page for an extensive list of AML/CFT advisory services we offer to support financial advisers’ anti-money laundering compliance, as well as AML/CFT compliance for other types of financial institutions and businesses subject to the AML/CFT regime.

 

AML/CFT Training and Capacity Building

We offer the following set of AML/CFT training and education solutions tailored to the financial advisers’ AML/CFT compliance requirements:

• Customized AML/CFT Training Solutions: Specialised AML training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on the financial advisers’ AML requirements, AML/CFT awareness, best practices, and ML/TF red flags.
• Up-to-date Regulatory AML Updates: Keeping your compliance officers, managers, and teams updated with changes in the financial advisers’ AML requirements, AML regulations and guidance.
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to financial planners’ money laundering, terrorist financing, fraud, and other types of financial crime.
• Practical Workshops: Interactive workshops for effective and goal-oriented AML/CTF compliance, capacity planning, and resource allocation, covering:

• KYC procedures for financial advisers
• KYB analysis and ML/TF risk assessment application to specific clients, transactions and situations
• The financial planners’ money laundering risks, common money laundering schemes and terrorist financing methods
• Improvements in clients’ onboarding and transaction monitoring procedures
• Reg-tech for AML compliance
• Internal and external AML/CTF reporting
• Related risk and compliance issues, including financial crime prevention
• Application of the risk-based approach to financial advisers’ money laundering, fraud risks, and terrorism financing
• Suspicious matter reporting guidelines
• The implementation of customer identification programs and KYC procedures
• Strategic and operational ML/TF risk management
• AML/CTF specifics of the cross-border financial advisory services
• Other obligations related to the AML requirements for financial advice

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world financial planners’ money laundering, terrorist financing, and common financial advisers’ fraud scenarios, as well as specific challenges related to the financial advisers’ AML/CTF compliance that your business is likely to face.
• Further information: You can visit our AML training solutions page for an extensive list of AML/CFT training solutions we offer to financial advisers and other businesses subject to AML/CFT regulations.

 

Comprehensive AML/CFT Managed Solution for Financial Advisers

Our financial advisers’ AML/CFT compliance management solutions include but are not limited to:

• AML/CFT Compliance Leadership: We act as your dedicated AML/CFT compliance officers (aka “Money Laundering Reporting Officers” or (MLROs)) and as compliance managers, fully managing AML/CFT compliance and handling the financial advisers’ anti-money laundering obligations for your business.
• Financial advisers’ anti-money laundering risk management: Conducting detailed assessments to identify ML/TF risks, assess their inherent impact and likelihood of occurrence for your business, evaluate the effectiveness of mitigations and controls in place, and formulate residual risk ratings.
• Managing Client Onboarding process and Customer Due Diligence: Implementing robust Know Your Customer (KYC), Know Your Business (KYB), customer due diligence (CDD), and enhanced due diligence (EDD) processes, for all types of clients, including higher ML/TF risk clients.
• PEP and Sanctions Screening: Managing thorough compliance with AML surveillance requirements by screening against global sanctions and politically exposed persons (PEPs) lists. This covers both initial and ongoing screening, as well as escalation processes for true positives.
• UBO verification streamlining: Verification of beneficial ownership in line with the financial advisers’ AML requirements, identifying and assessing individuals who hold ultimate control over assets. This includes initial and ongoing checks, with procedures to address discrepancies and high-risk cases as they arise.
• AML Transaction Monitoring: Developing and implementing a set of business-specific ML/TF alerts and red flags to detect and report suspicious transactions, helping you comply with the AML requirements for financial advice in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring and Financial Advisers’ Prevention Solution: Related to the above, we also help with the implementation of fraud alerts and red flags to detect, prevent, and respond to fraudulent transactions and activities.
• AML/CFT Tech Handling: Leading the alignment of AML/CFT technology implementation with your business processes and AML/CFT objectives. This also includes reviewing AML/CFT technology against the AML requirements for financial advice and your core policies and procedures.
• AML/CTF and Data Sharing: Handling information requests from law enforcement agencies, AML/CTF supervisors, and other relevant AML/CTF-designated entities—such as your banking partners, FX platforms, liquidity providers, finance providers, etc.—to help you manage your AML/CTF compliance-related communications.
• Internal AML/CFT Reporting Solutions: Facilitating structured reporting workflows for your board and its delegate committees, with a specific focus on AML/CFT compliance. This includes:

• preparing and presenting comprehensive AML/CFT performance metrics
• providing insights into AML/CFT compliance effectiveness
• reporting on the effectiveness of internal controls and mitigations for your general AML/CFT obligations and the sector-specific financial planners’ money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to AML requirements for financial advice
• ongoing progress against your organisation-wide AML/CFT compliance calendar
• alignment of your business's AML/CFT performance with specific project goals and relevant KPIs
• other factors to ensure that the management function is well-informed and aligned with AML/CFT compliance requirements for financial advisers.

• Financial Advisers’ AML and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with financial advisers’ anti-money laundering requirements for reporting captured activities and transactions. This includes managing externally reportable matters covered by the following report types: Suspicious Activity Reports (SARs), Suspicious Matter Reports (SMRs), Suspicious Transaction Reports (STRs), Prescribed Transaction Reports (PTRs), Threshold Transaction Reports (TTRs), and their equivalents.
• Periodic AML/CFT Reporting: Organising and overseeing the preparation, data storage, and effective submission of required periodic reports to your AML/CTF supervisors, helping you comply with the statutory reporting AML requirements for financial advice.
• Financial advisers’ Prevention Management: Implementing targeted fraud prevention measures, enhancing internal controls, and helping you comply with internal policies and external regulations. We work to mitigate fraud risks without disrupting business processes, aligning fraud prevention efforts with your broader compliance objectives.

 

 

KYB Solutions for Financial Advisers’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with financial advisers’ AML requirements. These include:

• Establishing ML/TF risk scoring models and parameters for different risk categories: We establish criteria to assess the ML/TF risk levels of your client base by identifying key risk factors based on their business nature, activities, jurisdictions, and other relevant characteristics and develop a risk scoring model to classify clients into different ML/TF risk categories such as low, medium, and high risk.
• Implementing a Customised KYB Process: We can help you roll out the KYB process across all departments to help your teams become sufficiently trained and equipped to handle clients' ML/TF risk effectively when it comes to verification, monitoring, ongoing due diligence, and other processes.
• KYB Technology and Automation: We select and evaluate technologies that can automate various parts of the KYB process, such as data collection, risk scoring, sanctions screening solutions, and ongoing monitoring.
• KYB-Related Escalation Process: We can develop and implement a clear escalation procedure for handling high-risk clients or irregularities, including the triggers for escalation, the actions required at each step, and the responsibilities for resolving these issues.

 

Core Policies and Procedures for Financial Advisers’ AML/CFT Compliance

We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective financial advisers’ AML/CFT compliance management, including the following:

• Financial advisers’ AML/CFT Framework Development: Covering specific AML requirements for financial advice and obligations under national AML/CTF laws and regulations, any applicable AML/CFT guidance, your risk appetite, your existing human and technology resources, your business structure, your history of AML/CFT compliance, and your current and future business goals.
• AML/CTF Risk Assessments: Focused on the AML requirements for financial advice for risk management as they relate to specific ML/TF risks faced by your business in terms of its size, products, client types, jurisdictions of operation, delivery channels, and the financial institutions it interacts with when delivering its services. Also covering the assessment of the effectiveness of existing controls and mitigations in place to determine the residual risk rating for both general ML/TF risks relevant to the most designated service providers/AML/CFT reporting entities and industry-specific ML/TF risks faced by financial advisers as these apply to your business operations. Visit our AML/CTF Risk Assessment page for more information.
• Comprehensive AML/CTF Programs (aka “AML/CFT Programme” in some jurisdictions): When it comes to financial advisers’ anti-money laundering compliance, your AML/CFT program is a core document that details how your business complies with various compulsory AML/CFT obligations, covering:

• the initial and ongoing CDD and EDD processes
• verification methods and requirements for identity, address, and source of funds
• internal and external reporting
• ongoing due diligence
• transaction monitoring
• employee vetting and training
• PEP and sanctions screening, and more

Our financial advisers’ AML solution is about grounding your AML/CTF program in reality and developing it based on your circumstances, including:

• your AML/CFT Risk Assessment
• your available ML/TF systems and controls
• your available resources
• your compliance budget
• your AML/CTF compliance team's experience and size
• your stakeholders' interests
• your available AML technology and other relevant factors
• Further Information: Visit our AML/CTF Programs page for more information.

• Financial Advisers’ AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of financial advisers’ AML/CTF compliance. This is why our solutions cover the development and enhancement of a detailed set of AML/CTF procedures and protocols to meet the distinct needs of your business, with a focus on effective AML risk management across various business processes and AML requirements for financial advice as they apply to each step of your customer journey.
• AML Manuals and Guidelines: These are more detailed, practical resources that support the procedures by providing step-by-step instructions, specific reference points, and standards. Depending on your business size and complexity, we develop and enhance internal manuals and guidelines necessary for effective and efficient AML/CTF compliance. These include AML Operating Manuals, guiding materials, and guidelines that outline what to do for each process, step, or decision within your procedures.
• ML/TF Controls Mapping: Implementing controls based on your documented risks is another cornerstone of financial advisers’ anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with financial advisers’ AML requirements, address specific financial crime, money laundering, and terrorist financing trends, and respond to any findings from internal and external AML/CFT auditors and supervisors.
• AML Red Flag Identification and Response Protocols: This is another area where a well-written AML policy or program must face the reality of operational speed, the workload across different teams, available tools, client base size, and other factors. That is another part of our financial advisers’ AML/CFT solution focuses on developing clear guidelines for identifying and responding to red flags indicative of fraud, money laundering, or terrorist financing activities, enabling you to take timely and appropriate action in different circumstances.
• AML/CTF Policy Update: Assisting with the review and enhancement of your core AML/CTF documents and operational procedures to reflect changes in your AML policies, including those caused by:

• updates in the AML/CTF laws, financial advisers’ AML regulations or AML supervisors’ sector guidance
• internal changes in your business structure, size, and resources
• the launch of new products or expansion to new jurisdictions
• changes in your risk appetite
• changes in related obligations, such as privacy laws, information sharing, financial advisers’ fraud prevention requirements, and more
• AML/CFT issues identified during internal or external reviews or audits
• other relevant factors

 

AML/CFT Technology Integration Support

Streamlining AML Compliance & CRM Management: Our financial advisers’ AML solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient financial advisers’ anti-money laundering compliance management. This includes AML compliance technologies and tools that cover:

• Customer Due Diligence Automation
• E-KYC and Online Identity Verification
• Customer Onboarding Streamlining
• PEP and Sanctions Screening
• Ultimate Beneficial Owner (UBO) identification,
• KYB Solutions and AML/CFT Risk Management
• AML Alert Management
• Ongoing Due Diligence Obligations Management
• Internal AML/CFT reporting
• Financial Advisers’ Fraud Prevention
• AML/CFT Incident Management
• Exception Escalation and Management
• AML/CFT Management Automation: Including automated response workflows and AI technology
• Financial Advisers’ AML/CFT Obligations for External Reporting
• Customisable AML/CFT measures specific to onboarding and monitoring of your high ML/TF risk clients
• Financial Advisers’ AML/CFT Obligations for Record-Keeping
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to financial planners’ money laundering and terrorist financing red flags
• Effective CRM for handling AML requirements for Financial Advice

 

Financial Advisers’ AML/CFT Audit Solutions

Having over ten years of AML/CFT compliance experience, ranging from AML/CFT framework and controls development and testing to successful AML/CFT management and issues resolution for various reporting entities, gives us the necessary expertise and qualifications to be your AML/CFT auditors.

We offer two comprehensive AML/CFT audit options to review your compliance with financial advisers’ anti-money laundering obligations. These options are:

Statutory AML/CTF Audit Option: A comprehensive review of your existing AML/CTF framework to assess whether your business complies with AML/CTF standards and applicable obligations. We independently test your compliance with both local AML/CTF obligations and specific financial advisers’ AML requirements. These often include but are not limited to:

• adherence to your AML/CTF risk assessment and operational AML/CFT procedures, including the existence of controls and mitigations to address money laundering and terrorist financing risks identified in your risk assessment
• compliance with your core AML/CFT documents, including sample testing
• your CDD requirements
• your staff vetting requirements
• your AML/CFT management processes
• your client onboarding and offboarding processes
• your EDD requirements, including source of wealth (SOW) and source of funds (SOF) requirements and application of the risk-based approach to different ML/TF risk levels
• your transaction monitoring process, covering large, complex, and unusual transactions and patterns
• your ODD processes
• your record-keeping process
• your suspicious matter reporting process (also known as "suspicious activity" or "suspicious transaction" reporting in some jurisdictions)
• your other reportable transactions process (typically covering cash and cross-border transactions)
• the way you detect and address material changes in client relationships
• your initial and ongoing screening process
• and other obligations for financial advisers’ AML/CFT compliance

Assurance Levels: Our statutory AML/CFT audit options are available as both:

• A limited assurance audit
• A reasonable assurance audit

Further Information: Please visit our AML/CFT Audit page for more information.

Internal AML/CFT Audit Option: Apart from an independent statutory audit, we also offer an internal AML audit option to prepare financial advisers for an external audit by an independent auditor, an AML/CTF supervisor’s review, or a review by another significant business stakeholder, such as a banking partner or an equity purchaser. This option is also suitable for significant business events like reorganisation or expansion.

Here, we go beyond merely meeting AML requirements for financial advice and focus on evaluating the effectiveness of your AML/CFT controls and ML/TF risk management processes for alignment with:

• the ML/TF risks faced by your business, including your Know Your Business (KYB) analysis
• financial advisers’ anti-money laundering compliance obligations
• your current and future goals
• your business model
• your current and prospective client inflow
• the specific AML/CFT compliance areas or requirements (this process can be tailored to address particular AML issues or compliance areas, ensuring a targeted approach to financial advisers’ anti-money laundering compliance)

We help you not only identify any gaps and weaknesses but also provide insights on how to enhance your controls and respond to these in a commercially oriented manner for smarter AML/CFT compliance. Please visit our Internal AML/CFT Review Solution page for more information.

 

AML/CFT audit-related solutions:

• Post-Audit Remediation Support: We assist with the implementation of post-audit remediation actions, addressing and resolving any identified AML/CFT issues.
• AML/CFT Attestation Support: Our financial advisers’ AML solutions include helping you prepare the required attestations for your AML/CFT supervisor and other stakeholders. This involves confirming that all necessary remedial actions have been completed and that adequate AML/CFT compliance measures have been put in place.
• Post-Audit Stakeholders’ Liaison: We manage your communications with national AML/CTF supervisors, banks, auditors, insurers, and other stakeholders, ensuring smooth progress in reporting on the status and completion of your post-audit action plan.

 

 

Financial Advisers’ Fraud Prevention Solutions

The financial advisers’ anti-money laundering control environment is closely related to prevention of financial crime in general, and fraud prevention in particular. Financial advisers’ fraud prevention controls and ML/TF controls can form a unified compliance management framework tailored to the specific ML/TF and fraud risks your business is facing or is likely to face. Our Financial Advisers’ Fraud Prevention Solutions include:

• Fraud Risk Assessment and Analysis: Conducting assessments to identify and prioritise fraud risks across your operations, allowing you to allocate resources effectively.
• Incident Response and Investigation: Creating response plans to manage fraud incidents, including guidelines for investigating, documenting, and applying corrective actions to minimise potential damage.
• Implementing Preventive Measures: Setting up checks, alerts, and controls to tackle fraud risks in the financial advice sector, as well as drafting a set of procedures and guidelines to address fraud scenarios that you are likely to face or have faced.
• Data Analytics for Fraud Detection: Leveraging data analytics to identify focus points for your fraud prevention efforts and areas for improvement.
• Fraud Detection Technology Implementation: Choosing and helping you implement appropriate technology for real-time fraud detection.
• Fraud Awareness Training: Educating staff about fraud risks, including identity theft and impersonation.
• Further information: Please visit our Fraud Management Solutions page for more information.

Financial Advisers’ Fraud Response Requirements: In the current risk and compliance environment, implementing fraud prevention measures is either already mandated by law in some jurisdictions or, at minimum, expected by government agencies, financial market participants, and other stakeholders.

 

Broader Risk & Compliance Solutions for Financial advisers

Your AML/CFT compliance is generally more effective when the right hand knows what the left hand is doing, and at the very least, they do not interfere with each other. Incorporating your controls and procedures for compliance with the AML requirements for financial advice into an overall risk and compliance management framework efficiently can increase your overall risk compliance effectiveness. This is where our experience can help you. Apart from AML/CFT compliance solutions for financial advisers, we include the following risk and compliance solutions:

• Compliance Advisory and Management: A comprehensive set of solutions for second-line compliance management, including both compliance advisory and compliance management options. Visit our Compliance Solutions page for Financial Advisers for more information
• Third-line Compliance Assurance: A range of third-line compliance defence solutions covering compliance assurance program development and implementation, internal controls design, and controls testing solutions
• ISO Standards Compliance: A range of solutions for compliance with the International Organization for Standardization (ISO) standards, helping you prepare for ISO certification
• FATCA and CRS Compliance: A comprehensive set of solutions for complying with the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) requirements, including tax residency verification, ongoing due diligence, reporting, and record-keeping
• Privacy Law Compliance: A range of solutions covering development, implementation, and testing of data privacy controls, procedures, and tools required to meet the applicable obligations under the Privacy Act, the GDPR, ISO 27701, etc.
• Financial Licensing and Registration: A set of financial licensing solutions for financial advisers, including preparation, licensing process management, regulator liaison, and post-licensing support in:

• Australia
• The United Kingdom
• The United States
• Singapore
• Offshore financial centres and tax havens
• New Zealand

 

Common Money Laundering Risks for Financial Advisers

Financial planners’ money laundering risk types can be broadly classified into five categories:

• Product types (services offered)
• Delivery methods
• Customer types
• The institutions involved in delivering your services
• Jurisdictions of operation

Given the variety of products offered by different businesses, as well as their different business structures and operations, the examples below of money laundering risks faced by financial advisers represent only a sample and are not exhaustive.

 

Product-Related Risks and Financial Advisers’ AML Compliance

Some of the product-related ML/TF risks relevant to financial advisers’ anti-money laundering compliance include:

• Lack of Verification for High-Risk Investment Products: Absence of controls to assess and monitor investments in high-risk products, such as derivatives or private equity funds, increases ML/TF exposure by enabling illicit fund layering.
• Insufficient Processes to Verify Source of Wealth for Large Contributions: Failure to verify the origin of significant investments into portfolios or funds leaves financial advisers vulnerable to handling illicitly sourced funds.
• Inadequate Oversight of Insurance-Linked Investment Products: Lack of mechanisms to detect and prevent misuse of insurance products, such as single-premium policies or annuities, for laundering money through layering or integration stages.
• Failure to Monitor Multi-Layered Financial Instruments: Lack of robust controls to identify risks associated with opaque financial instruments used to conceal asset ownership and obscure the movement of illicit funds.
• Insufficient Scrutiny of Cash Contributions in Real Estate-Linked Advice: Absence of mechanisms to monitor large cash payments or unconventional transactions linked to property purchases creates vulnerabilities in layering illicit funds.

 

Customer Type-Related AML Risks for Financial Advisers

Some of the customer type-related ML/TF risks relevant to financial advisers’ anti-money laundering compliance include:

• Failure to Identify High-Risk Clients with Complex Corporate Structures: Inadequate verification of ultimate beneficial ownership (UBO) in clients using layered corporate entities or trusts to obscure identities and asset origins increases ML/TF vulnerabilities.
• Insufficient Enhanced Due Diligence (EDD) for High-Net-Worth Individuals (HNWIs): Lack of robust EDD measures for HNWIs engaging in complex investment activities may result in undetected ML/TF risks, particularly when sources of wealth or funds are unverifiable.
• Lack of Mechanisms to Identify Risks in High-Risk Industries: Advising clients from industries with elevated ML/TF risks, such as gambling or high-value commodities, without tailored risk-based measures increases the likelihood of undetected illicit activities.
• Failure to Detect Large, Complex, or Unusual Transaction Patterns: Insufficient systems to monitor or flag clients funding investments through multiple sources not aligned with their declared source of wealth (SOW) creates opportunities for layering illicit funds.
• Inadequate Mechanisms to Link Client Activities to Declared Profiles: Lack of controls to compare transactional behaviour against clients’ financial profiles hinders detection of inconsistencies, such as unexplained top-ups or unusual account activity.
• Inadequate Due Diligence in Declarations of Source of Wealth (SOW) or Source of Funds (SOF): Financial advisers issuing SOW or SOF declarations without conducting comprehensive due diligence on clients’ funds create significant risks of facilitating money laundering, regulatory non-compliance, and reputational damage.

 

Delivery Method Risks and Financial Advisers’ AML Compliance

Revised Delivery Method Risks and Financial Advisers’ AML Compliance Some of the delivery method-related ML/TF risks relevant to financial advisers’ anti-money laundering compliance include:

• Inadequate Verification in Non-Face-to-Face Onboarding: Failure to implement effective identity verification measures for remote onboarding increases exposure to fraudulent clients or identity theft, which can facilitate money laundering.
• Reliance on Third-Party Digital Platforms Without Oversight: Using external platforms for client onboarding, document submission, or advice delivery without adequate monitoring or due diligence increases vulnerabilities, particularly if these platforms lack sufficient AML/CFT controls.
• Lack of Clear Criteria for High-Risk Client Segmentation: Digital delivery models that fail to implement differentiated measures (e.g., EDD for high-risk clients) for specific service types or jurisdictions may miss ML/TF risks tied to client behaviour or geographic exposure.

Jurisdictional Risks and Financial Advisers’ AML Compliance

Some of the jurisdictional ML/TF risks relevant to financial planners’ money laundering prevention include:

• Insufficient Focus on Jurisdiction-Specific Red Flags: Failure to tailor ML/TF risk assessments for clients from high-risk jurisdictions or industries prone to corruption or illicit financing (e.g., mining, gambling) creates vulnerabilities in applying effective initial and ongoing due diligence measures.
• Inadequate Screening for Overseas Beneficial Ownership: Failure to verify the beneficial ownership of clients located in higher ML/TF risk jurisdictions may obscure the true origins of funds or control over a client.
• Lack of Ongoing Monitoring for Jurisdictional Changes in Client Profiles: Advisers can fail to reassess client ML/TF risk when clients change their domicile to higher ML/TF risk, or sanctioned jurisdictions risk facilitating money laundering.

 

 

Institutional Risks and Financial Advisers’ AML Compliance

Some of the institutional ML/TF risks relevant to financial advisers’ anti-money laundering compliance include:

• Reliance on Financial Institutions with Weak AML Controls: Advisers collaborating with banks, payment processors, or custodial institutions in jurisdictions with weak AML/CFT frameworks may inadvertently expose themselves to ML/TF risks due to insufficient oversight of these entities.
• Outsourcing Compliance Functions Without Adequate Oversight: Delegating key AML/CFT compliance components, such as transaction screening or beneficial ownership verification, to third-party providers without understanding their processes or monitoring performance increases vulnerabilities.
• Lack of Monitoring for Transactions via Intermediaries: Failure to scrutinise transactions processed through intermediaries or partner institutions with insufficient AML measures can result in undetected ML/TF activities.

 

Standard Anti-Money Laundering Requirements for Financial Advisers

Given the variety of AML requirements for financial advice, this list is not exhaustive:

• Conducting customer due diligence, including appropriate KYC checks: Ensuring verification of customers’ identities, as well as identities of beneficial owners of customers that are legal entities.
• Conducting transaction monitoring: This largely depends on the specific business model and specific national AML/CFT regulations. It may involve monitoring deposits and withdrawals or other transactions to identify and report suspicious transactions and patterns. In other cases this may not apply.
• ODD requirements: Conducting ongoing customer due diligence, which is generally based on the customers’ ML/TF risk profiles and ML/TF risk categories, as well as changes in their activities, behaviours, or risk factors.
• Staff Vetting: Performing comprehensive background checks and ongoing vetting of staff to maintain high standards of integrity and awareness.
• Reporting Certain Non-Suspicious Transactions: Obligation to report cross-border or cash transactions over a certain threshold, as per the local AML/CFT regulations, in a timely manner. However, if the transaction is processed through a local bank or another reporting entity, reporting requirements may depend on the local AML/CFT regulatory interpretation.
• Compliance with the regulatory obligations: Including registering with your local AML/CTF supervisor, appointing an AML/CTF officer or an MLRO, answering requests for information from the police, regulators and your AML/CTF supervisor, filing an annual report and more.
• Regular Staff Training: Providing continuous training to ensure employees are aware of AML/CFT protocols and can recognise red flags.
• Timely Reporting of Suspicious Transactions: Ensuring that suspicious transactions and activities are reported to the relevant authority (either your local AML/CFT supervisor or a financial intelligence unit (FIU)) within the required deadlines.
• ML/TF Risk Assessments: Conducting regular assessments of ML/TF risks faced by your business is a part of AML risk management for financial planners and advisers.
• Independent AML/CFT Audits and Financial Advisers: Organising periodic independent reviews of the AML/CFT program, other core documents, and components of your AML/CFT framework to assess their existence, compliance, application, and, where applicable, effectiveness, depending on local AML/CFT audit guidance.
• Applying EDD measures: Conducting enhanced due diligence on certain customers and certain transaction types.
• Establishing Clear AML/CFT Policies and Procedures: Creating documented guidelines for staff to follow.
• Monitoring PEPs and Sanctioned Entities: Implementing measures for additional scrutiny of politically exposed persons and entities on sanction lists.
• Screening Against Watchlists: Regular checks of clients against domestic and international watchlists.
• Ensuring Proper Record-Keeping: Maintaining detailed and accurate records of client information and transactions in compliance with AML/CFT regulations.

 

Common Financial Advisers’ AML/CFT Issues

This is not an exhaustive list and could include:

During Customer Onboarding

• Failure to Conduct Comprehensive Due Diligence for High-Risk Clients: Advisers neglecting enhanced due diligence for clients with ties to higher-risk jurisdictions or industries may facilitate the onboarding of individuals involved in financial crime.
• Inadequate Validation of Client-Provided Information: Accepting self-reported financial details without independent verification increases the risk of onboarding clients with misrepresented SOW/SOF or fictitious identities.
• Insufficient Mechanisms for Detecting Fraudulent Client Identities: Advisers lacking effective identity verification processes, particularly for remote clients, risk onboarding individuals using stolen or synthetic identities.
• Failure to Evaluate the Purpose of Advisory Services: Advisers who do not assess the intent behind requested advisory services may miss red flags indicating potential ML/TF activities.

 

After Customer Onboarding

• Neglect of Periodic Risk Reassessment for Clients: Absence of mechanisms to reassess client profiles after significant changes—such as jurisdictional shifts, unexpected investment behaviours, or high-value transactions—creates vulnerabilities in identifying emerging ML/TF risks.
• Inadequate Monitoring of Investments in Complex Products: Failure to monitor client activities in high-risk financial instruments, such as structured products or derivatives, increases exposure to ML/TF risks without appropriate escalation mechanisms.
• Absence of Mechanisms to Detect and Escalate Layering Risks: Lack of systems to identify and escalate concerns when clients diversify funds across multiple investments or accounts without clear economic justification increases exposure to financial crime.
• Failure to Refresh KYC Based on Triggering Events: Without specific triggers—such as changes in portfolio activity, withdrawal patterns, or risk factors—advisers may retain outdated client information, leading to missed detection of evolving ML/TF risks.

 

 

Common Financial Advisers’ Fraud Risks

The following financial advisers’ fraud categories are not exhaustive:

• Financial Advisers and Identity Fraud: Fraudsters impersonate financial advisers to access clients’ sensitive financial information or investment accounts, often misdirecting funds or making unauthorised transactions. Phishing schemes targeting advisers or clients to steal credentials also contribute to identity fraud.
• Financial Advisers and Transaction Fraud: Fraud involving unauthorised client transactions, falsified trade confirmations, or fabricated documentation to justify improper fund movements.
• Financial Advisers and Insider Fraud: Instances where advisers or employees misuse privileged access to client accounts or investment portfolios for personal financial gain or to commit fraud.
• Financial Advisers and Investment Misrepresentation Fraud: Misleading clients about investment risks or returns, often to gain higher commissions or promote unsuitable financial products.
• Financial Advisers and Churning Fraud: Advisers engage in excessive trading within client portfolios to generate higher commissions, regardless of the client’s investment objectives or best interests.
• Financial Advisers and Ponzi or Pyramid Scheme Facilitation: Advisers unknowingly or negligently recommend investments linked to Ponzi or pyramid schemes, exposing clients to significant financial losses.
• Financial Advisers and Technology Fraud: Exploitation of weaknesses in digital platforms used by advisers, including tampering with automated trading systems or account portals to conduct fraudulent activities.
• Financial Advisers and Offshore Investment Fraud: Promoting or advising on offshore investments with minimal oversight, where funds are misappropriated or used for illicit activities.

 

 

Common AML/CTF Red Flags for Financial Advisers

The following financial advisers’ fraud categories are not exhaustive:

1. Financial Advisers and Identity Fraud: Fraudsters impersonate financial advisers to access clients’ sensitive financial information or investment accounts, often misdirecting funds or making unauthorised transactions. Phishing schemes targeting advisers or clients to steal credentials also contribute to identity fraud.
2. Financial Advisers and Transaction Fraud: Fraud involving unauthorised client transactions, falsified trade confirmations, or fabricated documentation to justify improper fund movements.
3. Financial Advisers and Insider Fraud: Instances where advisers or employees misuse privileged access to client accounts or investment portfolios for personal financial gain or to commit fraud.
4. Financial Advisers and Investment Misrepresentation Fraud: Misleading clients about investment risks or returns, often to gain higher commissions or promote unsuitable financial products.
5. Financial Advisers and Churning Fraud: Advisers engage in excessive trading within client portfolios to generate higher commissions, regardless of the client’s investment objectives or best interests.
6. Financial Advisers and Ponzi or Pyramid Scheme Facilitation: Advisers unknowingly or negligently recommend investments linked to Ponzi or pyramid schemes, exposing clients to significant financial losses.
7. Financial Advisers and Technology Fraud: Exploitation of weaknesses in digital platforms used by advisers, including tampering with automated trading systems or account portals to conduct fraudulent activities.
8. Financial Advisers and Offshore Investment Fraud: Promoting or advising on offshore investments with minimal oversight, where funds are misappropriated or used for illicit activities.

 

Common AML/CTF Red Flags for Financial Advisers

The Financial Action Task Force (FATF) and various national AML/CTF supervisors outline the following ML/TF red flags for financial advisers’ anti-money laundering compliance. This is not an exhaustive list:

• Unusual Wealth Indicators: Clients whose wealth, assets, or investments significantly exceed their declared income or financial history, without verifiable explanations.
• Complex or Layered Investment Structures: Use of intricate investment arrangements that obscure the origin of funds or beneficial ownership, particularly across multiple jurisdictions.
• High-Risk Jurisdiction Investments: Clients investing in jurisdictions with weak AML/CFT controls or sanctions without additional due diligence measures.
• Frequent Portfolio or Strategy Changes Without Rationale: Unexplained or unjustified alterations in investment strategies or portfolios, inconsistent with the client’s profile or objectives.
• Use of Offshore Entities: Investments routed through offshore entities or accounts without clear ownership or economic justification.
• Unverified Source of Funds: Clients unable or unwilling to provide documentation verifying the source of funds or wealth for their investments.
• Third-Party Directed Investments: Clients following directives from unrelated third parties to make investments, raising questions about the true purpose or intent.
• Inconsistent Investment Returns: Investments generating returns that are abnormally high or disconnected from market trends, potentially masking illicit financial activity.