Hi

If you run a small accounting or bookkeeping practice, or advise one (as I do), you’ll want to sit up for this. The UK government has announced that the FCA will become the single supervisor for anti-money-laundering (AML) and counter-terrorism-financing (CTF) obligations in the professional services sectors. That includes accounting and bookkeeping practices, legal firms and trust & company service providers. 

Here’s what it means for you, why it’s generating concern, and what proactive steps you could begin now.

What’s changing

Until now there were multiple “professional body supervisors” (PBSs) – around 22 in the accounting/ legal world – plus the FCA, HMRC and the Gambling Commission. 

The government has decided to shift AML/CTF supervision for roughly 60,000 regulated firms in the accountancy, legal, trust & company services sectors to the FCA. 

The FCA will carry out this role “independently of HM Treasury”, will be given necessary powers and will aim to enhance the UK’s defences against illicit finance. 

The impression I have of the FCA is they produce voluminous guidance for other sectors that they currently supervise and I’m concerned that we might get a great deal more detailed provisions, which we will have to carefully follow and it could just create extra work for accountants in practice.

The change isn’t immediate — enabling legislation, funding arrangements and detailed transition and delivery plans are still to be developed. No firm date yet.

Why there’s concern (and why you should be alert)

From what I’ve reviewed, several red‐flags for small practices and sole practitioners emerge:

Increased burden and cost: One professional body (the Institute of Chartered Accountants in England and Wales) has warned this move will “only increase the regulatory burden and costs to firms”. 

Less sector-specific approach: Some firms fear the FCA’s model may be more rules-based, less sympathetic to the day‐to‐day of small accounting practices. One adviser said the impression is: “we might get a great deal more detailed provisions … it could just create extra work for accountants in practice.” 

Unclear funding model: The transition will cost money. It isn’t yet clear how costs will pass on — through levies or fees or additional licences. The worry is extra cost for firms. 

Knowledge loss risk: Existing PBSs possess sector knowledge. That expertise might be at risk when supervision transfers. The transition period may be a risk window. 

Timing uncertainty: With no date yet, firms must prepare but also avoid wasted effort. The change could take years to bed in. 

Why the government did this

From the government’s and FCA’s viewpoint, the current regime was seen as fragmentary and inconsistent.

The 2023 consultation highlighted that having 23 supervisors leads to “inconsistencies” in supervision and complicates collaboration with law enforcement. 

The FCA already supervises financial services firms under AML/CTF rules, so the logic is: leveraging that existing regime to include professional services. 

So the goal is “simplification” and “consistency”. Whether it will deliver that without harming small firms remains to be seen.

What this means for your accounting practice or those you advise

Given the above, here’s what I suggest you begin doing now, as both 

mentor/advisor and as practitioner working with clients.

Audit your current AML/CTF controls
– Ask: Do our risk assessments reflect the size and nature of our client base?
– Are our firm’s processes well documented? Are we ready for a change in supervisor?
– If you are relying heavily on your professional body’s supervision now, recognise that may change.

Build flexibility into your compliance budget
– Since costs may increase (levies, fees, new systems), build a buffer.
– Discuss with your finance team/owner whether additional resource (time, software) may be needed.

Stay regularly informed
– The consultation on the powers the FCA will have is due in November.
– Keep track of legislative progress. The transition will matter, especially if your firm is “high-risk” in AML terms.

Communicate with clients (if you serve other practitioners)
– If you advise other small firms, make them aware: change ahead.
– Encourage them not to assume “status quo” will remain.

Consider the opportunity for deeper value-added advice
– This change creates an opportunity: you can help clients position their firm as “compliance resilient” ahead of the change and make that a competitive differentiator.
– Ask them: is our compliance infrastructure an investment in trust and growth, not just a cost?

Ask strategic questions
– For example: If the firm grows via acquisition, how will the new AML regime handle integration and risk profiling?
– If the firm uses significant technology (which your ideal client does), are our AML controls aligned with that technology (real-time data, cloud systems, integration with client onboarding)?

Is there a better way?

Yes — and I’d suggest thinking beyond “we’ll just respond when regulation lands”. Instead:

Proactively position your practice: Treat AML/CTF compliance not just as a checklist but as part of your service offering. This may give you competitive advantage.

Collaborate with your professional body now: Before the transition, your current PBS may provide insights. Leverage that expertise.

Use technology: For smaller firms especially, cloud and real-time systems (which you favour) can make AML workflows leaner, more transparent, more defensible. Could your onboarding, client screening and transaction monitoring platform be upgraded or refined now?

Scenario-plan: What happens if the change is delayed? What happens if it happens swiftly? Build internal policy contingencies.

Educate your team: The transition may bring new expectations for data, reporting, oversight. A well-trained team will fare better and cost less in remedial work.

For your clients — small growing businesses and the accountants/sole practitioners you may advise — this is a significant change. It signals a shift in risk, oversight and potentially cost. But it also presents opportunity: those who prepare ahead will be ahead.

I’ll be watching how the FCA sets out its consultation on powers, how funding is handled (levies/fees), and how the transition plan is structured. I’d suggest you do too.

Noel Guilford