Specialised Solutions for Wealth Managers’ AML/CTF Compliance Management

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CFT), and fraud prevention solutions for wealth managers’ anti-money laundering compliance that are tailored to applicable AML/CTF (aka CTF) laws, regulations, AML/CTF supervisors' guidance for the wealth management sector, sector-specific red flags and indicators, to help your business meet applicable obligations that cover wealth managers’ 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 wealth managers’ AML requirements in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of wealth managers’ 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 wealth managers
• Any wealth managers' fraud prevention obligations or expectations your business may be subject to
• Any related compliance obligations, including, but not limited to, wealth managers’ 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 wealth managers
• 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 wealth managers’ anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

 

Which Types of Wealth Manager Do We Support?

Focusing on money laundering (ML), terrorism financing mitigation (TF), and fraud prevention, our wealth management AML solutions cover the following types of wealth management service providers and institutions that are designated as AML/CTF service providers (aka “reporting entities”):

• Wealth Management Firms
• Private Wealth Advisors
• Family Offices
• Investment Management Firms
• MIS Managers and DIMS Managers
• Trust and Estate Planning Services
• Financial Advisors handling high-net-worth clients
• Private Banking Divisions
• Other financial institutions and businesses subject to the wealth managers’ AML requirements

 

What Jurisdictions Do Our Wealth Management AML Solutions Cover?

• Wealth managers’ AML solutions in Australia: Wealth managers’ AML requirements in Australia are outlined under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and AML/CTF Rules, supervised by the Australian Transaction Reports and Analysis Centre (AUSTRAC).
• Wealth managers’ AML solutions in New Zealand: Wealth managers’ AML obligations in New Zealand are regulated under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, overseen by the Financial Markets Authority (FMA).
• Wealth managers’ AML solutions in the United Kingdom: Wealth managers’ AML compliance requirements in the UK are defined by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and their subsequent amendments with supervision by the Financial Conduct Authority (FCA).
• Wealth managers’ AML solutions in the United States: Wealth managers’ AML obligations in the U.S. are governed by the Bank Secrecy Act (BSA) enforced by the Financial Crimes Enforcement Network (FinCEN). While wealth managers (investment advisers) are not directly required to establish AML programs under the BSA, they may be subject to AML requirements through affiliations with broker-dealers or other financial institutions. Additional oversight by the Securities and Exchange Commission (SEC) may apply, particularly regarding compliance with the Investment Advisers Act of 1940.
• Wealth managers’ AML solutions in the European Union: Wealth managers’ AML requirements across the EU are based on the Sixth Anti-Money Laundering Directive (AMLD6), enforced by National Competent Authorities (NCAs) with coordination by the European Banking Authority (EBA).
• Wealth managers’ AML solutions in Singapore: Wealth managers’ AML obligations in Singapore are stipulated under laws such as the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, regulated by the Monetary Authority of Singapore (MAS) through AML/CFT Notices and Guidelines.

 

 

Wealth Managers’ AML Advisory and Support

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

• Detailed AML/CTF compliance advice: Tailored to wealth managers’ AML requirements for different processes, including but not limited to customer due diligence (CDD) for wealth managers’ client onboarding, 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
• Wealth managers’ 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 wealth managers. Also, tailored to wealth managers’ fraud environment, risk management practices, and stakeholders’ expectations and obligations (banks, regulators, insurers, shareholders, etc.).
• Banking relationships advice: Advising wealth management 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 wealth managers 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 wealth managers’ 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 wealth managers’ anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help wealth managers 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 wealth managers’ 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 wealth managers’ AML/CFT compliance requirements:

• Customised AML/CFT Training Solutions: Specialised AML training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on the wealth managers’ 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 wealth managers’ AML requirements, AML regulations and guidance.
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to wealth managers’ 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:

• Wealth managers’ client onboarding and KYC procedures and protocols
• KYB analysis and ML/TF risk assessment application to specific clients, transactions and situations
• The wealth managers’ 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 wealth managers’ 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 wealth management services
• Other obligations related to the wealth managers’ AML requirements

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world wealth managers’ money laundering, terrorist financing, and common wealth managers’ fraud scenarios, as well as specific challenges related to the wealth managers’ 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 wealth managers and other businesses subject to AML/CFT regulations.

 

Comprehensive AML/CFT Managed Solution for Wealth Managers

Our wealth managers’ 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 wealth managers’ anti-money laundering obligations for your business.
• Wealth Managers’ 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 effective wealth managers’ client onboarding process that covers Know Your Customer (KYC), Know Your Business (KYB), customer due diligence (CDD), and enhanced due diligence (EDD) requirements, 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 wealth managers’ 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 wealth managers’ AML requirements in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring and Wealth Managers’ Fraud 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 wealth managers’ AML requirements 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 wealth managers’ money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to wealth managers’ AML requirements
• 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 wealth management providers.

• Wealth Managers’ AML and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with wealth managers’ 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 wealth managers’ AML requirements for statutory reporting.
• Wealth managers’ Fraud 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 Wealth Managers’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with wealth managers’ 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 Wealth Managers’ AML/CFT Compliance

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

• Wealth managers’ AML/CFT Framework Development: Covering specific wealth managers’ AML requirements 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 wealth managers’ AML requirements 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 wealth managers 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 wealth managers’ 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 CDD and EDD processes for wealth managers’ client onboarding
• the ongoing due diligence process (ODD) and the KYC refresh
• 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 wealth managers’ 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.

 

• Wealth Managers’ AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of wealth managers’ 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 the wealth managers’ AML requirements 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 wealth managers’ anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with wealth managers’ 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 why another part of our wealth managers’ 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, wealth managers’ 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, wealth managers’ 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: Our wealth managers’ AML solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient wealth managers’ 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
• Wealth Managers’ Fraud Prevention
• Ongoing Due Diligence Obligations Management
• Internal AML/CFT reporting
• Wealth Managers’ AML/CFT Obligations for External Reporting
• AML/CFT Incident Management
• Exception Escalation and Management
• AML/CFT Management Automation: Including automated response workflows and AI technology
• Customisable AML/CFT measures specific to onboarding and monitoring of your high ML/TF risk clients
• Wealth Managers’ AML/CFT Obligations for Record-Keeping
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to wealth managers’ money laundering and terrorist financing red flags
• Effective CRM for handling Wealth Managers’ AML Requirements

 

Wealth Managers’ 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 wealth managers’ 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 wealth managers’ 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 wealth managers’ 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 wealth managers 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 wealth managers’ AML requirements 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
• wealth managers’ 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 wealth managers’ 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 wealth managers’ 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.

 

Wealth Managers’ Fraud Prevention Solutions

The wealth managers’ anti-money laundering control environment is closely related to prevention of financial crime in general, and fraud prevention in particular. Wealth managers’ 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 Wealth Managers’ 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 wealth management 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.

 

Wealth Managers’ 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 Wealth Managers

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 wealth managers’ AML requirements 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 wealth managers, 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 Wealth managers 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 wealth managers, including preparation, licensing process management, regulator liaison, and post-licensing support in:
• The United Kingdom
• The United States
• Australia
• Singapore
• Offshore financial centres and tax havens
• New Zealand
• The European Union

 

 

Common Money Laundering Risks for Wealth Managers

Wealth managers’ 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 wealth managers represent only a sample and are not exhaustive.

 

Product-Related Risks and Wealth Managers’ AML Compliance

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

• Failure to Monitor Complex Investment Portfolios: Lack of controls to assess and monitor high-value portfolios with diverse asset classes increases risks of layering illicit funds through wealth management services (wealth management firms).
• Insufficient Scrutiny of Asset Transfers Within Managed Accounts: Weak oversight of intra-account asset transfers, particularly those without clear economic justification, enables obfuscation of illicit fund movements (wealth management firms).
• Insufficient Due Diligence on Customised Investment Products: Lack of measures to evaluate tailored financial products designed for individual clients increases exposure to ML schemes that exploit customised asset structures (private wealth advisors).
• Failure to Verify Source of Funds for High-Value Transactions: Absence of controls to verify the legitimacy of funds used for large investment purchases or contributions to portfolios creates risks of integrating illicit funds (private wealth advisors).
• Misuse of Family Trusts for Fund Transfers: Inadequate monitoring of funds transferred through family trusts increases risks of concealing illicit funds behind legitimate estate planning activities (family offices).
• Weak Controls for Cross-Border Asset Movements: Lack of enhanced due diligence on assets transferred internationally within family-controlled structures creates vulnerabilities for layering funds (family offices).
• Inadequate Oversight of Structured Investment Vehicles: Failure to monitor complex investment structures, such as private equity funds or hedge funds, allows layering of illicit funds through managed accounts (investment management firms).
• Unjustified Portfolio Liquidations: Lack of controls to flag frequent or large-scale liquidations without clear rationale exposes firms to risks of integrating illicit funds into the financial system (investment management firms).
• Insufficient Monitoring of Client-Directed Transactions: Failure to oversee high-risk transactions initiated by clients, such as frequent asset reallocations, creates opportunities for layering illicit funds (MIS managers and DIMS managers).
• Weak Scrutiny of Non-Traditional Investment Products: Lack of due diligence on non-traditional products, such as cryptocurrencies or alternative assets, increases exposure to laundering schemes (MIS managers and DIMS managers).
• Failure to Verify Beneficial Ownership of Trust Structures: Insufficient verification of beneficiaries and grantors within trusts allows funds to flow through arrangements with hidden ownership (trust and estate planning services).
• Weak Oversight of Asset Transfers Within Estate Plans: Lack of controls to monitor the transfer of high-value assets, such as real estate or securities, facilitates misuse for layering illicit funds (trust and estate planning services).
• Inadequate Scrutiny of High-Value Investment Recommendations: Failure to ensure that investment choices align with the client’s financial profile allows funds to be integrated through inappropriate financial products (financial advisors handling high-net-worth clients).
• Weak Monitoring of Early Investment Withdrawals: Lack of measures to investigate premature redemptions or withdrawals from investments creates risks of layering illicit funds (financial advisors handling high-net-worth clients).
• Unverified Client-Designed Portfolio Allocations: Allowing clients to dictate complex portfolio structures without adequate oversight increases exposure to laundering through asset layering (private banking divisions).
• Failure to Monitor Cross-Border Investment Activity: Lack of transaction monitoring for cross-border trades within managed portfolios enables misuse of funds across jurisdictions (private banking divisions).

 

 

Jurisdictional Risks and Wealth Managers’ AML Compliance

Some of the jurisdictional risks relevant to wealth managers’ money laundering prevention include:

• Absence of Controls to Detect and Apply Due Diligence Measures on Source of Wealth Originating from Higher ML/TF Risk Jurisdictions: Failure to implement measures to identify, assess, and apply appropriate due diligence to funds originating from higher-risk jurisdictions exposes gaps in detecting illicit activities.
• Investment Transfers for Fund Movement Rather than Genuine Returns: Lack of measures to identify investments structured to obscure the source of wealth for the recipient. This typology often involves transfers from higher to lower ML/TF risk jurisdictions, where the recipient claims their source of wealth as payments received from an MIS or DIMS.
• Weak Monitoring of Investment Ownership Changes Across Jurisdictions: Lack of controls to assess and monitor ownership transfers to unrelated third parties in different jurisdictions increases ML/TF vulnerabilities.
• Failure to Monitor Changes in Beneficial Ownership in Corporate, Trust, or Investment Vehicle Clients: Absence of controls to detect and verify changes in beneficial ownership, especially where new owners are linked to higher-risk jurisdictions, facilitates obfuscation of illicit activities.
• Inadequate Screening for Foreign PEPs and Sanctions Lists: Lack of systems to effectively screen foreign politically exposed persons (PEPs) or match individuals and entities against sanctions lists weakens compliance with jurisdictional AML/CFT requirements.

 

Delivery Method Risks and Wealth Managers’ AML Compliance

Some of the delivery method-related ML/TF risks relevant to wealth managers’ anti-money laundering compliance include:

• Remote Onboarding Without Effective EKYC Processes: Lack of controls to link documents supplied to the identity of a person signing up for an account.
• Lack of Effective Controls to Detect Large, Complex, and Unusual Transactions and Patterns: Failure to implement effective ongoing due diligence measures for monitoring large or complex transactions, as well as irregular patterns, weakens the ability to address ML/TF risks arising from transaction-related activities. Also, absence of specific measures to detect and review significant, complex and unusual transactions and patterns related to non-traditional payment methods, such as P2P payment services, digital wallets, hawala, etc.
• Lack of Documentation for Multi-Jurisdictional Transfers: Weak monitoring and documentation for cross-border asset movements within family-controlled structures facilitated remotely (family offices).
• Failure to Conduct Ongoing Monitoring for Digital Transactions: Absence of controls to identify unusual transactions involving digital wallets or alternative payment systems linked to family trust accounts (family offices).
• Failure to Audit Digital Payment Channels: Lack of controls to review payments processed through digital wallets or wealth managers’ platforms for unusual transaction patterns (investment management firms).
• Insufficient Oversight of Third-Party Managed Accounts: Delegation of onboarding to external managers without monitoring their adherence to AML/CFT compliance requirements (investment management firms).
• Unverified Remote Changes to Beneficiaries or Trustees: Lack of verification controls for beneficiary or trustee changes requested remotely (trust and estate planning services).
• Lack of Monitoring for Cross-Border Trust Disbursements: Failure to detect unusual disbursements from trust accounts to foreign jurisdictions without adequate oversight (trust and estate planning services).
• Remote Transactions Without Due Diligence on Source of Funds: Absence of measures to verify the origin of funds transferred remotely for high-value investments (financial advisors handling high-net-worth clients).
• Failure to Monitor Cross-Border Payment Transfers: Lack of controls for large international transfers conducted remotely, particularly those involving high-risk jurisdictions (private banking divisions).

 

 

Customer Type Risks and Wealth Managers’ AML Compliance

Some of the customer type-related ML/TF risks relevant to wealth managers’ money laundering prevention include:

• Customers Using Trusts or Complex Ownership Structures: Absence of controls to verify beneficial ownership and identify hidden relationships in trusts, shell companies, or layered entities. Failure to apply appropriate due diligence measures based on the complexity or transparency of the ownership structure (trust and estate planning services, family offices).
• PEPs and Their Associates: Lack of controls to assess and apply a risk-based approach to due diligence for PEPs, their family members, or close associates. This includes failure to differentiate between PEPs.
• Non-Resident Clients from Higher ML/TF Risk Jurisdictions: Insufficient measures are needed to evaluate and document the legitimacy of SoW and SoF for non-resident clients operating in or linked to higher ML/TF risk jurisdictions (wealth management firms, private banking divisions).
• Clients Using Nominees or Intermediaries Without Transparency: Lack of controls to identify and investigate transactions involving nominees or intermediaries. This includes failure to scrutinise the economic purpose or true ownership of assets, which can facilitate layering or fund concealment (investment management firms, MIS and DIMS managers).
• Unverified Beneficiaries in Trust or Estate Plans: Weak controls to verify and monitor changes to beneficiaries or trustees in trusts or estate plans. Lack of appropriate measures to address additions of unrelated or high-risk individuals (trust and estate planning services, family offices).
• Customers with Unexplained Wealth or Sudden Influx of Funds: Insufficient measures to identify and address discrepancies between a customer’s declared wealth and financial activity. This includes failure to investigate significant inflows of funds without supporting documentation or economic rationale (financial advisors handling high-net-worth clients, private banking divisions).
• Clients Engaged in Higher-Risk Industries:  Failure to assess and monitor clients whose primary business activities are in industries associated with higher ML/TF risks, such as extractive industries, cash-intensive businesses, or sectors prone to bribery and corruption.
• Clients Using Gatekeepers to Facilitate or Obscure Transactions:
  Failure to assess and monitor the role of gatekeepers such as lawyers, accountants, or other intermediaries who may structure transactions, create complex ownership arrangements, or shield beneficial owners (investment management firms, private wealth advisors, trust and estate planning services).

 

 

Institutional Risks and Wealth Managers’ AML Compliance

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

• Engagement with Unregulated or Informal Financial Entities: Lack of controls to identify risks posed by partnerships with unregulated investment platforms, private funds, or informal networks, which may fall outside traditional regulatory oversight.
• Lack of Coordination with Payment Facilitators: Absence of measures to coordinate with payment facilitators on the identification and verification of transaction originators and beneficiaries.
• Reliance on Third-Party Introducers Without Oversight: Absence of effective measures to monitor AML/CFT agents who conduct onboarding on wealth manager’s behalf.

 

AML/CFT Issues for Wealth Managers

The following list is not exhaustive:

 

During Customer Onboarding

• Failure to Verify Beneficial Ownership: Lack of controls to identify and verify the beneficial ownership of clients using trusts, shell companies, or offshore entities, increasing vulnerabilities to fund layering and ownership obfuscation (trust and estate planning services, family offices).
• Insufficient Screening of Clients for Sanctions and PEP Risks: Absence of measures to screen clients or stakeholders against sanctions lists or identify politically exposed persons (PEPs), leading to inadequate risk assessments and exposure to illicit funds (private banking divisions, private wealth advisors).
• Inadequate Source of Wealth and Source of Funds Verification: Failure to implement effective due diligence measures to confirm the legitimacy of clients’ declared source of wealth (SoW) and source of funds (SoF), particularly for clients from higher-risk industries such as real estate, luxury assets, or international trade (wealth management firms, private banking divisions).
• Acceptance of Clients Without Complete Documentation: Onboarding clients with missing or insufficient records, such as incomplete identification documents or unverified financial declarations, exposes wealth managers to undetected ML/TF risks (financial advisors handling high-net-worth clients, investment management firms).

After Customer Onboarding

• Weak Monitoring of Client Transactions: Lack of effective transaction monitoring systems to detect large, complex, or unusual transactions, preventing the identification of potential layering or fund movement risks (MIS and DIMS managers, wealth management firms).
• Unverified Changes to Beneficiaries or Trustees: Absence of controls to assess and verify frequent or unexplained changes to beneficiaries or trustees in client accounts or estate plans, increasing risks of fund misdirection or concealment (trust and estate planning services, family offices).
• Inadequate Review of Cross-Border Fund Transfers: Failure to monitor large or frequent cross-border transfers involving higher-risk jurisdictions, including inadequate evaluation of origin and destination of funds (private banking divisions, wealth management firms).
• Failure to Conduct Ongoing KYC Refresh: Lack of regular Know Your Customer (KYC) reviews to ensure that client profiles, financial activity, and risk categorisation remain up to date. This allows outdated information to hinder the identification of evolving ML/TF risks (financial advisors handling high-net-worth clients, private wealth advisors).
• Lack of Controls for Understanding Clients’ Use of Multiple Related Accounts: Absence of measures to identify and assess the purpose behind clients using multiple interrelated accounts for investments or withdrawals. This creates vulnerabilities for layering, fund diversion, or obscuring the source of funds (wealth management firms, private banking divisions).

 

 

 

Common Anti-Money Laundering Requirements for Wealth Management Businesses  

Given the variety of wealth managers’ AML requirements, 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.
• Transaction monitoring and wealth managers: Monitoring deposits, withdrawals, and other transactions to identify and report suspicious transactions and patterns.
• 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 wealth management firms.
• Independent AML/CFT Audits and Wealth Managers: 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.

 

 

Basic CTF Risks for Wealth Managers

• Lack of Controls to Identify Suspicious Investment Patterns: Absence of systems to detect irregular or structured investment behaviours designed to mask potential links to terrorist financing.
• Failure to Conduct Terrorist Financing-Specific Due Diligence for High-Risk Clients: Lack of measures to assess clients with potential links to terrorism, such as those involved in high-value transactions or holding significant influence positions.
• Failure to Monitor Small, Consistent Transactions Below Reporting Thresholds: Lack of systems to detect low-value but frequent movements of funds indicative of terrorist financing strategies.
• Weak Screening Against Sanction Lists and Terrorism Links: Insufficient measures to identify and monitor clients or transactions with ties to sanctioned individuals or organisations.
• Failure to Monitor Cross-Border Transactions in High-Risk Jurisdictions: Lack of controls to assess and monitor cross-border fund movements, especially involving regions with less stringent AML/CFT frameworks.
• Failure to Monitor Changes in Client Behavior Aligned with Terrorist Financing: Inability to detect shifts in financial behaviour or activities that may indicate potential terrorist financing.
• Failure to Verify Source of Wealth and Funds Linked to High-Risk Sectors: Lack of measures to verify funds originating from sectors known for higher ML/TF risks, such as real estate, luxury assets, or international trade.
• Inadequate Training on Terrorist Financing Risks for Wealth Managers: Absence of targeted training programs for staff to identify and respond to terrorist financing indicators specific to wealth management operations.

 

 

 

Common Wealth Managers’ Fraud Risks

The following wealth managers’ fraud categories are not exhaustive:

• Wealth Managers and Identity Fraud: Fraud involving identity theft or impersonation to gain unauthorised access to client accounts, initiate fraudulent transactions, or alter sensitive client information.
• Wealth Managers and Investment Fraud: Fraudulent schemes where wealth managers’ services are misused to facilitate Ponzi schemes, misrepresent investment opportunities, or siphon client funds under false pretences.
• Wealth Managers and Insider Fraud: Fraud involving employees abusing their privileged access to wealth management systems or client accounts for unauthorised fund transfers, portfolio manipulations, or data leaks.
• Wealth Managers and Phishing Fraud: Phishing schemes targeting clients of wealth managers to steal credentials, gain access to client accounts, or execute unauthorised withdrawals.
• Wealth Managers and Technology Fraud: Exploitation of vulnerabilities in wealth management platforms, including manipulation of algorithms, transaction records, or client databases for fraudulent gains.
• Wealth Managers and Tax Fraud: Facilitating or being complicit in tax evasion schemes, including creating offshore structures or misrepresenting taxable income on behalf of clients.
• Wealth Managers and Digital Asset Fraud: Fraud involving cryptocurrencies or other digital assets, including unauthorised access to wallets, manipulation of digital portfolios, and misrepresentation of blockchain investments.
• Wealth Managers and Securities Fraud: Misuse of clients’ investment accounts for insider trading, market manipulation, or fraudulent securities transactions, including misrepresentation of financial instruments.
• Wealth Managers and Cross-Border Fraud: Fraudulent activities involving cross-border transactions, such as laundering funds through multi-jurisdictional investments or creating fictitious offshore entities to obscure fund origins.
• Wealth Managers and Fund Mismanagement Fraud: Fraudulent mismanagement of client funds, including embezzlement, misallocation of assets, or deliberate underperformance for personal gain.

 

Common AML/CTF Red Flags for Wealth Managers

The Financial Action Task Force (FATF) and various national AML/CTF supervisors outline the following non-exhaustive list of ML/TF red flags for wealth managers’ anti-money laundering compliance:

• Unexplained Source of Wealth or Funds:
  Clients failing to provide verifiable documentation to substantiate the source of funds, particularly for large-value investments or high-risk asset classes.
• Transactions Involving High-Risk Jurisdictions:
  Cross-border transactions originating from or directed to jurisdictions with weak AML/CFT controls or significant geopolitical risks, especially involving layered asset structures (MIS managers, DIMS managers).
• Frequent Use of Gatekeepers Without Transparency:
  Involvement of lawyers, accountants, or other intermediaries who structure client investments without disclosing the client’s identity or role in transactions (family offices, trust and estate planning services).
• Unusual Patterns of Small Transactions:
  Clients conducting frequent low-value transactions that cumulatively represent significant amounts, often structured to evade detection or reporting thresholds (DIMS managers).
• Involvement of Sanctioned or Politically Exposed Persons (PEPs):
  Transactions or client relationships involving individuals or entities flagged on sanction lists or presenting PEP-related risks, particularly where enhanced due diligence is not applied.
• Unexplained Changes in Account Beneficiaries or Ownership Structures:
  Frequent and sudden changes to beneficiaries, trustees, or legal ownership arrangements without a clear purpose (private banking divisions).
• Investments in Illiquid or High-Risk Asset Classes: Unusual or disproportionate investments in cryptocurrencies, private equity, or NFTs without adequate documentation or declared purpose (MIS managers).
• Client Requests for Anonymity: Requests for anonymity in transactions, account handling, or investment ownership without legitimate business justification (private wealth advisors, private banking divisions).
• Discrepancies Between Declared Wealth and Activity:
  Significant discrepancies between declared income or wealth and financial activity, particularly for high-net-worth individuals.
• Quick Purchases and Sales of Units: Rapid trading activity that deviates from a client’s stated investment goals or usual behaviour can indicate potential market manipulation or layering attempts.
• Transferring Funds Upon Request for Additional Due Diligence Information: Clients moving their entire portfolio to another provider whenever additional due diligence is requested may signal attempts to evade scrutiny.
• Deposits from Offshore Tax Havens: Incoming funds from jurisdictions known for secrecy or weak AML/CFT controls may obscure the true source of wealth.
• Account Ownership in the Name of a Spouse or Children: Use of family members’ names or accounts to hold investments without clear justification can suggest attempts to hide beneficial ownership.
• Gifting of Units or Investments: Sudden gifting of assets or investments shortly after acquisition can indicate efforts to conceal ownership or evade due diligence requirements.
• Payments from Third Parties: Receiving payments from unrelated third parties, especially without documentation or a clear business rationale, may indicate layering or integration of illicit funds.