• Wealth and Asset Managers

    Some services provided by wealth and asset managers are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

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Wealth and Asset Managers

What are the ML/TF Risks?

Wealth or asset management is the provision of banking and investment services in a closely managed relationship to high net worth clients.

Services will include bespoke services tailored to a client’s particular needs and may be provided through a range of products available to the client.

The availability of complex products and services that operate internationally within a reputable and secure wealth management environment that is familiar with high value transactions is attractive to money launderers and other criminals.

The Money Laundering and Terrorism Financing (ML/TF) risks associated with wealth and asset management include:

  • Clients may be reluctant or unwilling to provide adequate documents, details and explanations;
  • Clients often have many accounts in more than one jurisdiction, either within the same financial institution or group, or with different financial institutions;
  • The transmission of funds and other assets by private clients often involve high value transactions, requiring rapid transfers to be made across accounts in different countries and regions of the world;
  • Use of offshore trusts and companies as investment vehicles by customers;
  • Politically Exposed Persons (PEPs) and customers from higher risk jurisdictions;
  • Difficulty in identifying beneficial owners; and
  • Complexity of financial services and products offered may break the audit trail.

Wealth and asset managers must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.

What are the AML/CFT obligations?

In developing responses to obligations under AML/CFT laws and regulations the following steps must be undertaken:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment;
  • Develop an AML Program that is proportionate to ML/TF Risks;
  • Establish effective Board and Senior Management oversight of the AML/CFT Program;
  • Appoint an AML Compliance Officer;
  • Establish a Customer Due Diligence (CDD) Program including collection and verification of know your customer (KYC) information including Enhanced and Ongoing CDD controls;
  • Implement a ML/TF Risk Awareness Training Program for staff;
  • Implement a monitoring program to identify unusual and possibly suspicious customer activity, transactions and behaviour;
  • Establish a process to report suspicions and other activity specified by AML/CFT law and regulation;
  • Establish Record-keeping controls; and
  • Maintain the ML/TF Risk Assessment and the AML Program as the business and risks change.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real-world experience, has developed an AML/CFT Program Manual for the Wealth and Asset Management industry.

Our solutions deliver all the foundational AML/CFT materials including a ML/TF Risk Assessment, an AML/CFT Program, CDD Standards, and an AML Operating Manual, which you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

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