At a glance:
- Legal and accountancy regulators have been called out by their oversight body for persistent failings that leave the UK vulnerable to dirty money, in a critical report that should spur government plans to overhaul this broken system.
- The new report says “continued failures…call into question the consistency and effectiveness of AML supervision” by the 22 professional bodies that supervise lawyers and accountants for anti-money laundering (AML).
- The report highlights real concerns over light touch enforcement, noting that “some PBSs aren’t undertaking consistent, proportionate and sufficiently dissuasive disciplinary measures in circumstances where it would be warranted and justifiable”.
- It adds that “practical delivery” of information sharing about the role of professionals in money laundering remains “challenging” for some supervisors.
- As the Financial Conduct Authority prepares to assume responsibility for supervising lawyers and accountants, major improvements in supervision and enforcement by professional bodies are needed in the transition period which is likely to last several years.
Introduction
The latest report from the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) comes at a pivotal time as the government progresses plans to transfer supervision of the professional services to the Financial Conduct Authority (FCA).
Ensuring that the 22 professional bodies supervisors (PBS) which currently supervise lawyers and accountants maintain and improve their supervision during the transition period is absolutely crucial. Poor supervision leaves the UK dangerously exposed to illicit finance from organised crime and corruption that damages the economy and undermines long-term growth.
With supervisors still failing in critical areas and the UK imminently facing a major Financial Action Task Force review, this report brings home the urgency of pushing ahead with AML supervisory reform including by introducing legislation in the next King’s Speech.
But fixing these long-standing issues with AML supervision is not something that can be put on ice until the FCA picks up the mantle. Instead, they must be tackled as an essential part of a successful transition to streamlined supervision.
Supervision struggles
The OBPAS report highlights how the “continued failures” in AML compliance by supervised firms identified in the Treasury’s 2023/24 AML supervision report “call into question the consistency and effectiveness of PBS supervision”.
The report is particularly critical of what it calls an “assisted compliance culture”. While OPBAS says that supervisors need to help their firms comply with expectations, it adds that this should not be “disproportionate” and “come at the cost of holding members to account for material non-compliance”. It adds that some professional body supervisors can be overreliant on firms self-certifying their compliance after issues have been uncovered.
Concerningly, the report notes that the total number of onsite visits conducted by all 22 professional body supervisors has not yet returned to pre-pandemic levels. Although the total onsite visits had increased this year amongst the legal sector supervisors, the total number of visits decreased further within the accountancy sector.
While the report notes that supervisory staff are knowledgeable and professional, issues with “organisational structures and funding” do not set them up for success. And despite some progress, supervisors are still not doing enough to engage their populations and ensure that they understand what is required in terms of AML supervision.
Moving AML supervision to the FCA poses a risk that professional body supervisors do even less to inform firms of their need to comply with money laundering rules, and it’s not clear how successful the FCA will be in picking up the slack. So it’s essential that OPBAS pushes for more proactive engagement by supervisors during the transition period and ensures their sectoral expertise is integrated into the FCA.
Enforcement remains light touch
The report is scathing about professional bodies’ enforcement record, noting that they “continue to perform poorly in their enforcement approach relative to other Sourcebook areas”. The report does not mince its words, stating concerns that: “some PBSs aren’t undertaking consistent, proportionate and sufficiently dissuasive disciplinary measures in circumstances where it would be warranted and justifiable”.
This tallies with what we are seeing in our AML supervision tracker, which visualises statistics on how UK anti-money laundering supervisors are conducting their work. As the OPBAS report highlights, the number of legal sector firms which have had their membership of professional bodies cancelled for AML specific reasons has fallen from their peak in 2018/19, reaching a low of just 1 in 2023/24, in contrast to an increase in cancellations in the accountancy sector.
The legal sector imposed a record number and value of fines in 2023/24, but this was driven by a single supervisor – the Solicitors Regulation Authority. The accountancy sector supervisors imposed a similar number of fines to their counterparts in the legal sector but the average fine amount was over 6 times lower. Troublingly, OPBAS notes that some supervisors have faced challenges in recouping their fines which seriously undermines their deterrent effect.
With the FCA also coming under criticism for its weak approach to enforcement after its penalties fell by 78% in five years, there is much to do to ensure a strong deterrent for failing to comply with money laundering rules both during and after the transitional period.
Information sharing still a challenge
Supervisors are a key part of the AML enforcement landscape, with access to unique intelligence on money laundering that can help law enforcement bodies in their investigations particularly into professional enablers of economic crime. This is something that will continue after the FCA takes over supervision of professional services, not least because of the regulatory objective for the legal sector regulators to promote and detect economic crime.
So it’s concerning that while OPBAS says supervisors understand the importance of proactive sharing of information and intelligence, “practical delivery remains challenging for some”. This partly stems from underresourcing, with OPBAS noting that some supervisors would benefit from “investing further” in information and intelligence sharing resources. It may also partially derive from a cultural reluctance among some in law enforcement to trust professional body supervisors with sensitive information, though this is not specified in the OPBAS report.
Some supervisors appear to be making decent use of the Shared Intelligence Service (SIS), which lets supervisors share information with the FCA, other supervisors and law enforcement on AML matters. In 2025, SIS members raised a total of 274 requests for information on SIS and 925 uploads of intelligence, though it’s not clear how many of these were from professional body supervisors.
But professional body supervisors do not appear to be optimising the other main information sharing gateway – the Financial Crime Information Network (FIN-MET) – which connects almost 100 organisations with responsibilities related to regulation, AML supervision, or combatting financial crime affecting the UK’s financial system.
This is especially the case for proactively referring intelligence, with the 8 professional body supervisors which are FIN-MET members sending just 11 referrals in 2025 (up from 5 in 2021). On the flipside, these supervisors received, reviewed and responded to 593 referrals in 2025, which as OPBAS notes demonstrates their key role as providers of specialist intelligence about their supervised populations.
Next steps – getting the transition right
This latest OPBAS report makes it clear that major improvements are needed in the transition period as the FCA limbers up to take over responsibility for AML supervision of professional services.
OPBAS will be crucial to managing this transition. In particular, there are key questions that the government needs to answer in its response to a recent consultation on the FCA’s new powers and responsibilities over what will happen to active investigations by the current supervisors, and whether they will finish these or hand them over to the FCA; and how specialist knowledge will be transferred from these sectoral supervisors to the FCA.
OPBAS will need to play a robust role in holding professional body supervisors who will lose their AML supervisory responsibilities to account during the transition. To do this effectively, it will need to show much greater readiness to resort to its existing power of public censure – used for the first and only time in 2025.
But it will also need new powers to fine supervisors that fail to adequately supervise their populations during the transition period, as well as powers to remove AML supervisory responsibilities from supervisors who continue to perform poorly during the transition.
The onus is now on the government to publish its response to the consultation on the FCA’s powers and responsibilities and announce a timeline for fast-tracking legislation to make the FCA the supervisor for professional services.
Given the ongoing issues identified in OPBAS’ report and the importance of regulatory certainty, this major reform needs prompt and decisive implementation together with a clear plan to drive up standards during the transition.
