Your professional body is about to lose its AML supervision role, and what’s replacing it has the profession deeply concerned.
The Financial Conduct Authority (FCA) will become the sole anti-money laundering supervisor for all UK accounting firms, ending the current system where professional bodies like ICAEW, ACCA and CIOT handle AML oversight for their members.
The reaction from the profession is uniformly negative. Professional bodies warn of higher costs, more bureaucracy and supervision by regulators who don’t understand accounting practice. Practitioners who’ve seen how the FCA operates in other sectors aren’t optimistic either.
This affects every accounting practice in the UK. And while implementation is still months or years away, the time to understand what’s coming is now.
Key Points for Busy Readers
The FCA will replace 22 professional body supervisors as the single AML authority for approximately 60,000 UK accounting, legal and trust service firms. No implementation date has been set. Professional bodies unanimously oppose the move, warning of increased costs and loss of sector expertise.
Practitioners should expect more prescriptive guidance, higher supervision fees and stricter enforcement. Firms need to strengthen AML documentation now, as the FCA’s approach will be more formal and less sympathetic to the realities of small practices.
What Are the Changes with AML supervision & Why Are They Happening?
Currently, Anti-Money Laundering (AML) supervision in the UK is split between three public sector bodies and 22 professional body supervisors who ensure firms comply with the prevalent money laundering regulations.
For accountants, this typically means supervision by your professional body like ICAEW, ACCA, CIOT, ATT or others. The system isn’t perfect, but oversight comes from organisations that understand accounting practice.
That ends when the FCA takes over.
Following a 2023 consultation proposing four different models, the government has chosen to consolidate everything under the FCA. This makes the regulator responsible for approximately 60,000 firms across accounting, legal services, and trust and company service providers.
The stated aim is improving UK defences against money laundering through better coordination with law enforcement.
The problem? This wasn’t what the profession wanted. Not a single major professional body supported this option. They preferred strengthened supervision by professional bodies overseen by OPBAS (the Office for Professional Body Anti-Money Laundering Supervision).
The government ignored them.
Implementation timing remains unclear. The change requires new legislation, funding confirmation and a detailed transition plan. A consultation on the FCA’s specific powers will be published in early November 2025, but no go-live date has been announced.
What we do know is that when it happens, every accounting firm will move from professional body supervision to FCA oversight. And based on the FCA’s track record in other sectors, that means more rules, higher costs and stricter enforcement.
What Counts as the FCA's New Remit?
The FCA will become the “single professional services supervisor” responsible for ensuring firms meet their money laundering regulations obligations.
This includes:
- Risk Assessment & Monitoring – The FCA will categorise firms by money laundering risk and allocate supervisory resources accordingly. They claim this will be “risk-based,” with lower-risk firms receiving lighter-touch oversight. Whether that proves true remains to be seen.
- Compliance Checks & Inspections – Expect more formal, structured reviews of your AML policies, procedures and controls than most firms currently experience from professional bodies.
- Enforcement Action – The FCA will impose sanctions, penalties and restrictions on non-compliant firms. Given their enforcement culture in other sectors, penalties will likely be higher and imposed more readily than under professional body discipline.
- Guidance & Rule-Making – The FCA will issue detailed guidance on expectations. Anyone familiar with FCA rulebooks knows these tend to be voluminous and highly prescriptive.
Who Is Most Affected by This Change?
Every accounting firm currently supervised for AML will eventually move to FCA oversight. But the impact won’t be felt equally.
Solo practitioners and small firms face the most significant adjustment. You’ll likely pay separate FCA levies on top of professional body fees and supervision will feel far less tailored to small practice realities. The FCA supervises large financial institutions and their mindset doesn’t naturally translate to high-street accountants.
Mid-sized firms face the greatest disruption. You’re large enough to attract regulatory attention but lack the dedicated compliance teams of major firms. The FCA’s expectations around documented policies, management information and governance may require substantial investment to meet.
Large and network firms already operate under intensive scrutiny with established compliance infrastructure. The transition may feel less jarring, though costs and bureaucracy will still increase.
Firms in high-risk sectors should prepare for heightened attention. If you specialise in cash businesses, property transactions or international clients, the FCA has explicitly stated it will target resources at the highest-risk firms.
Practitioners nearing retirement may find this change accelerates their exit. Learning a new regulatory regime, paying higher fees and dealing with more demanding supervision may not feel worth it for those winding down.
What Your Firm Should Do Right Now
The transition won’t happen overnight, but waiting until the last minute to prepare would be a mistake.
- Review Your Current AML Procedures – Ensure your policies, controls and procedures are robust and well-documented. When the FCA takes over, they’ll review what you have in place. Starting from a strong position makes the transition easier.
- Strengthen Your Documentation – The FCA places heavy emphasis on documented evidence of compliance. Your working papers, risk assessments and decision-making processes should be clearly recorded and easily retrievable. Scattered spreadsheets and email chains won’t cut it.
- Assess Your Risk Profile – Consider how the FCA is likely to categorise your firm. If you work in high-risk sectors or with complex international clients, you’ll receive more intensive supervision. Understanding your risk profile helps you prepare appropriately.
- Budget for Increased Costs – The FCA will charge supervision fees, likely through a levy system. These may exceed your current professional body fees. Factor this into your pricing and financial planning now.
- Stay Informed – Watch for the November consultation on FCA powers and subsequent updates on implementation timelines. The more notice you have, the better you can prepare.
- Consider Your Professional Body Membership – Many practitioners maintain membership primarily for AML supervision. Once the FCA takes over, you’ll need to decide whether continuing membership still provides value. Professional bodies may need to reduce fees substantially to retain members who no longer require their supervisory function.
- Invest in Systems that Simplify Compliance – When regulatory demands increase, having the right infrastructure makes the difference between manageable compliance and overwhelming bureaucracy. Systems that integrate client onboarding, risk assessment, identity verification and AML documentation will become essential under FCA supervision.
Preparing for Stricter AML Supervision?
The FCA will expect robust systems and documented compliance. Discover which AML software features matter most and how to choose a solution that simplifies rather than complicates your workflow.
Compare your options: Best AML Software for Accountants in 2025: Top Solutions for Compliance | FigsFlow
The Uncomfortable Reality of the New AML Supervision System
Here’s what nobody in authority wants to acknowledge. There’s remarkably little evidence that the entire AML supervisory regime actually prevents money laundering.
Practitioners spend countless hours on client due diligence, risk assessments and policy documentation. Professional bodies charge substantial fees for supervision and issue penalties for paperwork failures. Yet prosecutions for money laundering remain rare, and when major scandals emerge, they typically involve banks, not small accounting practices.
The system excels at creating work, generating costs and penalising minor compliance failures. Whether it meaningfully reduces financial crime is far less clear.
The shift to FCA supervision won’t change this fundamental dynamic. If anything, it will intensify it. More rules, more costs, more penalties for technical breaches, while actual criminals continue largely unimpeded.
For firms already stretched by Making Tax Digital, ACSP registration, identity verification requirements, and the general burden of regulatory compliance, this feels like another weight added to an already groaning structure.
Additional Resources
- What is an AML Check – What is an AML Check| FigsFlow
- Best AML Software for Accountants – Best AML Software for Accountants | FigsFlow
- Complete Guide to AML Software – Complete Guide to AML Software for Accountants, Bookkeepers & Tax Advisors | FigsFlow
- The Latest UK AML Rules Explained – The Latest UK AML Rules Explained: Are You at Risk?
- Step-by-Step AML Checks Guide – Step-by-Step Guide to Clients’ AML Checks for Accountants
- Quick AML Compliance – AML Compliance in Under 60 Seconds? Yes, It’s Possible
Conclusion
The FCA takeover of AML supervision represents the most significant change in regulatory oversight for UK accounting practices in decades.
It wasn’t what the profession wanted or recommended. It will cost more, demand more, and be delivered by people with less understanding of how accounting practices actually operate.
But complaints won’t stop it. The decision has been made, legislation will follow, and at some point in the next few years, every accounting firm will transition to FCA supervision.
The firms that prepare now by strengthening procedures, investing in appropriate systems, and documenting everything properly will navigate this transition successfully. Those that ignore it until forced to act will struggle.
The regulatory environment for accounting practice keeps getting more complex and demanding. Firms that treat compliance as an unfortunate cost rather than a core operational requirement will find themselves increasingly exposed. This is the new reality, and adaptation is no longer optional.
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