The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, announced a significant postponement of the Anti-Money Laundering (AML) regulatory regime applicable to investment advisers. Originally scheduled to become effective on January 1, 2026, the compliance deadline for registered investment advisers (RIAs) and exempt reporting advisers (ERAs) under the Bank Secrecy Act (BSA) has been extended by two years, now anticipated to take effect on January 1, 2028.
Background and Overview
The AML rule, finalized by FinCEN in August 2024, aimed to explicitly classify RIAs and ERAs as “financial institutions” within the framework of the BSA. This classification would subject these advisers to new AML and countering the financing of terrorism (CFT) program requirements. The rule mandates advisers to develop, implement, and maintain a comprehensive, risk-based AML/CFT program designed to prevent their services from being used for money laundering, terrorist financing, or other illicit financial activities.
Key compliance components included:
- Development of risk-based policies, procedures, and controls tailored to each adviser’s business model and client risk profiles.
- Appointment of a dedicated compliance officer responsible for ensuring the program’s implementation and oversight.
- Establishment of ongoing employee training programs to ensure AML awareness.
- Implementation of independent program reviews to assess effectiveness.
In addition, a jointly proposed rule with the Securities and Exchange Commission (SEC) sought to impose customer identification program (CIP) requirements as part of the AML programs, emphasizing customer due diligence (CDD).
Reasons for Postponement
On July 21, 2025, FinCEN issued a statement announcing its intention to delay the effective date of the IA AML Rule to early 2028. This decision reflects multiple considerations:
- Need for Tailoring: FinCEN acknowledged that the rule must be effectively tailored to fit the diverse business models and risk profiles within the investment adviser sector. Given the industry’s complexity and variety, a one-size-fits-all regulatory approach may not adequately serve its objectives.
- Cost and Burden Considerations: The postponement intends to ease potential compliance costs and reduce regulatory uncertainty for investment advisers. FinCEN recognizes that immediate compliance could impose heavy operational and financial burdens on advisers.
- Comprehensive Review: The delay provides FinCEN and the SEC time to revisit both the scope and substance of the AML rule and associated customer identification provisions through additional rulemaking processes.
- Alignment with Broader AML Priorities: The agency aims to ensure that the AML framework for investment advisers aligns with evolving federal AML priorities and enforcement strategies.
FinCEN also committed to issuing formal exemptive relief during this postponed period to provide regulatory certainty and prevent immediate compliance requirements before the revised effective date.
Implications for the Industry
The postponement offers investment advisers a critical window to continue refining their AML frameworks and better prepare for eventual compliance. It temporarily relieves advisers from implementing novel and potentially complex obligations imposed under the new AML regime by 2026.
However, advisers are advised to maintain vigilance and monitor ongoing regulatory developments, as future rulemaking may introduce substantive amendments to current requirements. The coordinated review with the SEC, especially concerning CIP rules, could expand or reshape customer due diligence mandates.
Strategic Considerations for Advisers
- Risk Assessment: Firms should continue to conduct thorough risk assessments to identify vulnerabilities related to money laundering and terrorist financing.
- Program Development: While immediate compliance is postponed, initiating or enhancing AML programs based on existing best practices can position advisers for smoother eventual implementation.
- Regulatory Monitoring: Staying informed about updates from FinCEN and the SEC is vital to anticipate changes and adapt compliance strategies accordingly.
- Collaboration: Engaging with industry groups and legal counsel can provide guidance on navigating the evolving regulatory landscape.
Broader Regulatory Context
This deferral aligns with a recent trend in federal regulatory policymaking aimed at balancing stringent financial crime controls with cost-effective, risk-sensitive approaches. It parallels other federal agency actions, including several SEC proposals withdrawn or delayed in mid-2025, reflecting a recalibration of regulatory timelines and priorities.
Despite the delay, enforcement activities related to AML and sanctions remain robust under the current administration, underscoring the ongoing importance of effective compliance programs.
Conclusion
FinCEN’s postponement of the AML rule’s effective date for investment advisers until January 1, 2028, represents a strategic pause to refine regulatory requirements and balance compliance costs with enforcement goals. While this deferral offers temporary relief to RIAs and ERAs, it signals forthcoming changes in scope and substance that advisers should prepare for through continuous risk management and regulatory awareness.
As FinCEN and the SEC collaborate on future rulemaking, stakeholders must stay engaged to ensure readiness for the evolving U.S. AML regime in the investment advisory sector.
This development marks a notable regulatory adjustment, reflecting the complexity of applying AML frameworks to the investment adviser industry and the government’s commitment to effective, calibrated financial crime prevention.