What’s New

The UK Treasury has announced plans to move the anti-money laundering (AML) and counter-terrorist finance (CTF) supervision of around 60,000 professional services firms (law firms, accountants) from 23 different industry supervisors to the Financial Conduct Authority (FCA).

The rationale: the current supervisory system is fragmented, creating gaps and inconsistencies that have been criticised by the Financial Action Task Force (FATF).

What Went Wrong Before

Professional services firms have been treated as auxiliary, despite being core to financial crime risk—trusts, legal entities, nominee directors, tax structures. Traditionally, AML supervision for them has varied widely in strictness, scope and enforcement.

This variation created:

• Weak or inconsistent AML/CTF controls in legal/accounting sectors.
• Unclear accountability: who supervises what?
• Delayed adaptation to emerging risks (crypto, beneficial ownership, professional enablers).

In short: the supervisory model didn’t match the risk profile.

Key Changes & Implications

• The FCA becomes the single supervisor for these professional firms: law, accountancy, tax advisers.
• Supervisory criteria will align more closely with financial institutions: risk-based supervision, stronger enforcement, uniform standards.
• Firms must prepare for: increased regulatory burden, higher compliance expectations, and potential for increased fines or action.
• The roadmap: public consultation in Nov 2025, phased transition thereafter.

What Compliance Teams Should Learn

1. Professional firms face the same risk lens as banks. If your firm handles clients who create structures, trust arrangements, or manage cross-border flows, you’re in the supervisory spotlight.

2. KYC/KYB + professional-enabler risk become central. Expect scrutiny of how firms identify clients, trace beneficial ownership, and ensure transparency of structures they advise or administer.

3. Oversight excellence will be the baseline. Governance, audit trail, documentation, reviews—all will be looked at. Your compliance isn’t optional.

4. Transition isn’t tomorrow—but preparation is today. A timely gap-analysis might keep you ahead rather than scrambling later.

Action Plan for Firms & Compliance Teams

• Perform a quick impact assessment: Are you within scope (law, accounting, tax, trusts)?
• Map where your controls stand vs. banking-standard AML/CTF frameworks.
• Update your training and supervision model for professionals advising on risk & structures.
• Ensure documentation: client onboarding, ongoing reviews, beneficial ownership disclosures, professional-enabler risks.
• Monitor consultation outcomes and regulatory timelines closely.

Why It Matters

This regulatory shift signals that “business as usual” for professional services firms is over. Regulators are expanding their focus: from banks to the structures behind money. By aligning professional firms with bank-level supervision, the message is clear: if you facilitate risk, you’ll be held to bank standards.