Last updated: 15 Dec 2025 10:00 Posted in: Anti-money laundering
AIA has expressed disappointment at the UK government’s decision to overhaul the country’s anti-money laundering (AML) supervision system, removing the role of professional bodies and transferring responsibility to the Financial Conduct Authority (FCA).
The government’s long-awaited response to its consultation on reforming AML supervision confirms that the FCA will become a Single Professional Services Supervisor for accountants, lawyers, and trust and company service providers. This means that all firms currently supervised for AML purposes by professional bodies or HMRC will instead come under the FCA’s direct oversight.
The AIA believes that this move risks weakening, rather than strengthening, the UK’s defences against financial crime. While the association fully supports proportionate and effective action to tackle money laundering and terrorist financing, it argues that professional body supervision – with its detailed understanding of the accountancy profession – has proved both effective and trusted.
‘AIA is concerned by the government’s decision to create a Single Professional Services Supervisor for AML,’ said AIA Chief Executive Philip Turnbull. ‘We continue to believe strongly that moving away from professional body supervision of accountancy firms will not lead to more effective oversight.’
What has happened – and why
The decision follows a two-year review of the UK’s AML supervision regime, first announced in 2022. That review found that there has been progress since the introduction of the Money Laundering Regulations 2017, but also identified continuing weaknesses: inconsistent supervision, duplication across 25 different regulators, and gaps in information sharing with law enforcement.
Currently, AML supervision is divided between three public bodies – the FCA, HMRC and the Gambling Commission – and 22 professional body supervisors in the legal and accountancy sectors. Together, they ensure that firms have systems in place to prevent money laundering and terrorist financing, and they take action where rules are breached.
However, the system’s complexity has long been criticised. The 2022 review described it as ‘fragmented and inconsistent’, with too many bodies performing similar functions to varying standards. HM Treasury’s consultation in 2023 proposed four options for reform:
OPBAS+: strengthening the Office for Professional Body Anti-Money Laundering Supervision by giving it greater powers;
Professional body supervisors consolidation: reducing the number of professional body supervisors;
Single Professional Services Supervisor: transferring AML supervision to one public body; and
Single AML Supervisor: creating a single public authority to supervise all sectors.
The government has now chosen the Single Professional Services Supervisor model, giving FCA full responsibility for AML supervision of professional services – a significant centralisation of oversight.
The government’s reasoning
The government argues that the reform will simplify a complex system, strengthen consistency and improve collaboration with law enforcement. In the foreword to the consultation response, Economic Secretary to the Treasury Lucy Rigby KC MP said the change would make regulation ‘cohesive and easily navigable for professional services firms’ and would strengthen the UK’s defences against illicit finance.
The Treasury’s view is that public-sector supervision will bring three major advantages:
Under the new framework, the FCA will oversee around 60,000 firms across the accountancy, legal, and trust and company service sectors. It will operate independently of government, with powers to issue rules, conduct inspections and take enforcement action.
New primary legislation and a detailed transition plan will be required, as well as consultation on the FCA’s powers and funding model. Professional bodies will continue their supervisory roles in the meantime.
The AIA’s response
The AIA has consistently argued that reform is needed, but that centralisation is not the answer. In its 2023 submission to HM Treasury, the AIA advocated the OPBAS+ model – retaining professional body supervision while giving OPBAS stronger powers to ensure accountability. This model, AIA said, met all the government’s objectives, while preserving sector expertise.
By contrast, the AIA warned, the creation of a single supervisor poses significant risks:
‘The accountancy sector has built strong mechanisms to detect and prevent money laundering,’ said AIA Director of Policy and Regulation David Potts. ‘Replacing those with a single, distant regulator risks losing the deep understanding and culture of compliance that professional bodies have worked hard to build.’
The AIA emphasises that it does not oppose reform. It supports improving coordination and accountability, but it believes that the government’s chosen approach discards a system that was already delivering measurable improvement.
How we reached this point
The reform stems from the UK’s commitment to strengthen its response to economic crime, as reflected in the Economic Crime Plan 2023-26 and the Economic Crime and Corporate Transparency Act 2023. Internationally, the Financial Action Task Force (FATF) has identified weaknesses in the UK’s AML supervision, especially the fragmented nature of oversight in the legal and accountancy sectors, prompting the government’s consultation.
The consultation attracted 95 formal responses. Most accountancy and legal sector respondents – including the AIA – favoured OPBAS+, arguing that it offered improvement without disruption. Public sector and civil society respondents, however, largely supported the Single Professional Services Supervisor model, believing that professional bodies could not deliver consistent supervision.
Charts in the Treasury’s final report illustrate this divide: 89% of accountancy and legal respondents supported OPBAS+. Despite this, the government concluded that public-sector supervision offered the most sustainable long-term solution.
What the new system will look like
Once implemented, the FCA will become the sole AML supervisor for the accountancy, legal, and trust and company service sectors. The professional bodies will retain their wider roles in regulating professional conduct, ethics and qualification standards but will no longer oversee compliance with the Money Laundering Regulations.
The main features of the new system will be:
Firms that are already compliant with the existing AML rules should not have to make major changes to their internal controls, but they will need to familiarise themselves with new supervisory processes and reporting systems.
What it means for accountants
For practising accountants, the shift to FCA supervision represents a significant change. The FCA’s approach to regulation is typically more formal and enforcement-driven, relying heavily on data analysis and thematic reviews. This means that firms can expect:
The government has pledged to minimise ‘dual regulation’ and ensure that firms do not have to submit the same information to multiple regulators. However, practical overlap will be inevitable, and careful coordination will be needed to avoid confusion.
AIA’s broader perspective
The AIA’s concern extends beyond mechanics of supervision to the principle of professional accountability. Professional bodies such as AIA combine regulatory oversight with education, training and disciplinary functions – ensuring that AML compliance is part of a wider culture of professional integrity. The AIA argues that this cannot easily be replicated by a central regulator.
Professional supervision supports both deterrence and improvement – identifying weaknesses and helping them to improve and meet their obligations. Moving to a purely regulatory model may risk replacing professional judgment with administrative process – reducing AML compliance to a box-ticking exercise.
Internationally, AIA also highlights that many jurisdictions maintain a hybrid model, in which professional bodies play a supervisory role under the oversight of a public authority. In the EU, for example, the forthcoming Anti-Money Laundering Authority (AMLA) will coordinate national supervisors but not directly replace them.
‘The UK has an opportunity to build on a system that is already improving,’ the AIA said in its submission. ‘Enhancing OPBAS would strengthen accountability without losing the expertise and partnership that professional body supervision provides.’
What happens next
The October 2025 announcement sets the direction, but the timeline for implementation is still unclear. The next steps are:
Further consultation: HM Treasury has published a consultation on the powers that the FCA should have as the new SPSS.
Legislation: Parliament must pass enabling laws, and timing will depend on parliamentary schedules.
Transition planning: OPBAS, HMRC and the professional body supervisors will work with the FCA on data transfer, staff integration and risk management during the transition period.
Until legislation is enacted, professional body supervisors such as AIA will continue to carry out their AML supervisory responsibilities. Firms should therefore maintain their existing AML arrangements and remain alert to developments.
Continuing AIA’s commitment
Despite its disappointment, the AIA remains committed to constructive engagement. The association will work with government and regulators to ensure a smooth transition and to represent members’ interests. It will focus on three priorities:
AIA will also highlight the international implications of the UK reform. With members worldwide, AIA will examine how these changes affect cross-border compliance and what lessons can be drawn for other markets.
Looking ahead
This change is one of the most significant changes to AML regulation in the past decade. Whether it will achieve its goals depends on its ability to balance enforcement with professional understanding. For the government, success will mean greater consistency and stronger enforcement. For the professions, the challenge lies in ensuring that the new system retains the expertise, proportionality and trust built up under professional body supervision.
For AIA and its members, the message is clear: the association remains a voice for proportionate, expert-led regulation and will continue to advocate for reforms that strengthen – rather than sideline – the role of professional judgment in tackling economic crime.
Conclusion
Transferring AML supervision to the FCA represents a major policy shift – from a system rooted in professional self-regulation to one led by a central public authority. The AIA believes that this approach overlooks the proven value of professional body supervision and risks losing the expertise and engagement that have underpinned progress so far.
As the UK embarks on this transition, AIA will work to ensure that reforms are implemented responsibly, with minimal disruption to firms and maximum protection for the public.
The fight against money laundering is a shared responsibility. Whether supervision sits with professional bodies or a public regulator, success depends on collaboration, expertise and a deep understanding of how professional services operate in practice. Those principles will remain at the heart of AIA’s work in the months and years ahead.
‘AIA is concerned by the government’s decision to create a Single Professional Services Supervisor for AML. We continue to believe strongly that moving away from professional body supervision of accountancy firms will not lead to more effective oversight.’
Philip Turnbull. Chief Executive, AIA