Background on AML Supervision Reform
The UK government announced in October 2025 its decision to reform the anti-money laundering (AML) and counter-terrorism financing (CTF) supervision regime by transferring oversight from professional bodies to the Financial Conduct Authority (FCA) as a Single Professional Services Supervisor. This shift targets accountants, lawyers, and trust or company service providers currently supervised by 22 professional bodies and HMRC, aiming to address fragmentation identified in a 2022 review and Financial Action Task Force (FATF) critiques. The reform stems from the Economic Crime Plan 2023-26 and Economic Crime and Corporate Transparency Act 2023, following a 2023 consultation where the government rejected alternatives like strengthening the Office for Professional Body Anti-Money Laundering Supervision (OPBAS+).
Accountants’ Strong Opposition
UK accountancy bodies have decried the plan, arguing it undermines effective supervision rooted in sector expertise. The Association of International Accountants (AIA) expressed disappointment, stating the move risks weakening defenses against financial crime despite professional bodies’ proven improvements. ICAEW Chair of the Regulatory Board Parjinder Basra warned it would increase regulatory burdens, costs, and confusion for firms while fragmenting information on professional services activities. ACCA’s Maggie McGhee highlighted administrative challenges, higher costs, data risks, and added fragmentation, contradicting the government’s intent to reduce burdens.
Key Statements from Bodies
- AIA Chief Executive Philip Turnbull: “Moving away from professional body supervision of accountancy firms will not lead to more effective oversight.”
- ICAS Chief Executive Bruce Cartwright: Surprised by the decision, noting significant investments in supervision with evidence of increased effectiveness; prefers evolution over upheaval.
- AIA Director of Policy David Potts: Replacing mechanisms built by the sector with a distant regulator risks losing deep understanding and compliance culture.
These statements reflect consensus that professional bodies integrate AML with ethics, training, and discipline, unlike a centralized model.
Government Rationale and Transition
HM Treasury selected the Single Professional Services Supervisor model for consistent oversight of 60,000 firms, better law enforcement collaboration, and simplification from 25 supervisors. Economic Secretary Lucy Rigby KC MP emphasized cohesive regulation strengthening illicit finance defenses without altering firms’ Money Laundering Regulations (MLR) obligations. Implementation requires primary legislation, FCA powers consultation, and a transition plan; professional bodies continue roles interimly, with compliant firms needing minimal control changes but new processes.
Potential Impacts on Firms
Accountants anticipate FCA’s enforcement-driven style, including data analysis and thematic reviews, potentially raising compliance costs via fees and duplicated reporting despite pledges to minimize dual regulation. Critics fear box-ticking over professional judgment, reduced deterrence through improvement support, and challenges for smaller firms amid growth hurdles. Internationally, the UK diverges from hybrid models like the EU’s AMLA, potentially affecting cross-border compliance.
Broader Context and Next Steps
The reform responds to FATF-noted weaknesses in fragmented oversight, with 89% of accountancy/legal respondents favoring OPBAS+ in consultations, yet government prioritizing sustainability. As of January 2026, Bloomberg reports ongoing protests from bodies against duty shifts. Next: FCA delivery plan, public consultation (expected post-November 2025), legislation per parliamentary time. Bodies like AIA commit to engagement for smooth transitions, prioritizing minimal disruption. This overhaul marks a pivotal shift from self-regulation, balancing enforcement gains against lost expertise debates.