The UK government has confirmed that the Financial Conduct Authority (FCA) will become the single anti-money laundering (AML) supervisor for legal, accountability and trust and company service firms. The obligations aren’t changing, but the scrutiny is.
For most compliance professionals in the UK’s legal and accountancy sectors, the supervisors have always been familiar. The Solicitors Regulation Authority (SRA) and the Institute of Chartered Accountants in England and Wales (ICAEW) have long overseen AML compliance in their own corners of the market. Whatever its imperfections, it was a known quantity: a supervisor that spoke the sector’s language and, by most measures, carried a light touch.
That era is ending. On 21 October 2025, HM Treasury confirmed the outcome of its long-running review of the UK’s AML and counter-terrorist financing (CTF) supervision regime: the FCA will become the single professional services supervisor. When the change takes effect, AML/CTF supervision of legal service providers, accountancy service providers (including tax advisers) and trust and company service providers (around 60,000 in total) will move to the FCA. The professional bodies will continue to regulate conduct and professional standards in their sectors, but their AML supervisory role will end, and HMRC’s remit will narrow to the populations that remain outside professional services, such as estate agents and high-value dealers.
It is the biggest restructuring of UK AML supervision in a generation. The most important thing to understand about it is what is not changing.
Same obligations, different scrutiny
The Money Laundering Regulations themselves are not being rewritten. A firm’s duties remain exactly as they are. The government has been explicit that firms already in compliance should not need to change their controls simply because their supervisor has changed.
What changes is the nature of the supervision. The follow-up conversation that HM Treasury ran through November and December 2025 sketches the architecture: a new FCA register of professional services firms; a fit and proper assessment applied to firms and their owners; and the extension of established FCA supervisory tools to the new population. The government has also confirmed that the FCA ‘will be equipped to take strong enforcement action where it is necessary’ against willfully negligent or complicit firms.
In other words: the rules stay the same, but the referee does not.
Why this should focus minds
The reform did not come from nowhere. The Treasury’s own assessments have repeatedly found professional body supervision fragmented and inconsistent, and the compliance picture explains why. In 2024/25, only 24% of accountancy firms and 29% of legal firms assessed by their supervisors were found fully compliant with their AML obligations. Supervisors issued 338 fines totalling over £2 million in the same period and the trend is unmistakably upward, even before the FCA arrives.
Now consider who is inheriting that population. The FCA is a regulator with a long enforcement record on financial crime, and the proposed fit and proper gateway for professional services firms imports the same underlying logic: a named person, answerable for the firm’s defences, who must be able to demonstrate competence and capability.
For partners, COLPs, MLROs and nominated officers in law and accountancy firms, that is the real meaning of this reform. The majority of these firms have never been supervised by bodies with the FCA’s resources, data capability or enforcement appetite. The standards being asked of them are not new - the likelihood of being examined against those standards is.
The timeline is uncertain - the direction is not
No commencement data has been set. Implementation requires primary legislation, confirmed funding and detailed transition plans, and the government has acknowledged that the timing depends on parliamentary time. Informed commentary suggests the FCA is unlikely to assume supervision before late 2027, with a transition period running through 2028. Some analyses sketch the full implementation as reaching into 2029. The Treasury’s response to its powers consultation, expected during 2026, should bring more precision.
It is tempting to read that as breathing space, but it is better read as a deadline. Two or three years is roughly the time it takes to do this properly: to find out where your framework actually stands, close the gaps a skeptical examiner could find, embed the record-keeping that turns ‘we did consider that risk’ into evidence, and develop the people who will sit across the table from the new supervisor. Firms that begin when the FCA register opens will be doing all of this under scrutiny rather than ahead of it. One lesson from financial services’ own transition to FCA supervision is worth borrowing: regulators form lasting first impressions of firms, and of the individuals who front them.
Using the window
So what does preparation look like? At firm level, the components are familiar: a current, genuinely firm-specific risk assessment; due diligence and monitoring that reflect it; and documentation that can withstand someone whose job is to test it. But the harder component is capability. Someone in the firm has to be able to design that framework, judge its proportionality, defend it to an examiner and report on it credibly to the partnership or board. That is a professional skillset in its own right, and in sectors where AML has often been one hat among several, it is exactly the skillset the new regime will expose as present or absent.
This is where ICA’s qualifications are built to help. ICA’s certificates and diplomas in AML develop the practitioner skills the new supervisory environment will demand (risk assessment, due diligence, governance and reporting). Its specialists and advanced programmes, including the ICA Certified Money Laundering Reporting Officer certification, prepare the senior individual who will carry personal accountability for the firm’s defences. For professionals in the legal, accountancy and TCSP sectors, the period between now and FCA supervision is the moment to build that capability at a chosen pace, rather than under regulatory pressure.
The firms that move first
Reforms on this scale generate noise: consultations, professional body objections, arguments about fees and lost expertise. Much of it is legitimate, and some of it may yet shape the detail. But none of it changes the central fact for the people who do this work. Sixty thousand firms are getting a new supervisor: one that examines harder, expects evidence and is willing to put names on final notices.
The obligations were always there. What is arriving is scrutiny. The firms who use the transition window to get genuinely ready will find the new regime an opportunity to stand out. Those who treat 2028 as far away will discover how quickly a deadline arrives when someone else controls it.