Registered investment advisers in the US have officially entered a new regulatory era. FinCEN’s landmark anti-money laundering rule came into force on 1 January 2026, and its impact stretches well beyond back-office operations into every client communication and marketing asset a firm produces.
According to Luthor, the scale of the sector explains the scrutiny. SEC-registered advisers now oversee $144.6tn in assets across 15,870 firms serving 68.4 million clients. Meanwhile, AML-related fines hit $5bn in 2023, a 69% surge on the previous year, underlining just how aggressively regulators are policing financial crime.
Luthor recently took the time to discuss the new FInCEN AML rule and the key things RIAs need to know.
The final rule, published on 28 August 2024, designates nearly all SEC-registered investment advisers and exempt reporting advisers (ERAs) as “financial institutions” under the Bank Secrecy Act.
That means risk-based AML programmes, Suspicious Activity Report (SAR) filings, fund transfer recordkeeping and other BSA obligations are now mandatory. FinCEN has delegated examination and enforcement to the SEC, whose examiners will now assess RIAs for AML compliance in the same way they scrutinise broker-dealers.
The urgency stems from a glaring gap in the system. A Treasury risk assessment documented sanctioned persons, corrupt officials and fraudsters exploiting advisers’ lack of mandatory AML duties to access the US financial system, with bad actors from Russia and China funnelling money through private funds to acquire sensitive US technologies.
The rule also answers criticism from the Financial Action Task Force. State-registered advisers, family offices and foreign private advisers are excluded, but roughly 20,000+ advisory firms are estimated to fall within scope, including some 5,846 ERAs.
On beneficial ownership, the picture has shifted considerably. FinCEN’s March 2025 interim rule exempted all US-formed companies from Beneficial Ownership Information (BOI) reporting, refocusing the requirement solely on foreign companies registering to do business in the US and slashing expected filings from 32.6 million entities to roughly 20,000.
Foreign firms registered before 26 March 2025 had to file by 25 April 2025; new registrants have 30 days. Even so, RIAs should expect to use BOI data in due diligence, with FinCEN developing an “integrated CDD rule” to connect KYC processes with the BOI registry. Notably, as of late 2022, SEC-registered advisers reported $284bn in private fund equity owned by foreign investors whose ultimate owners were unknown.
Enforcement precedents are already stacking up. In January 2025 the SEC charged Navy Capital, which paid a $150,000 penalty after claiming to follow “voluntary” AML procedures while failing to vet high-risk foreign investors, one of whom had suspected money laundering ties.
In the same month, LPL Financial was fined $18m over systemic customer identification and monitoring failures. Since July 2024, the SEC has brought at least nine AML-related enforcement actions totalling more than $100m in penalties. Civil penalties can reach $25,000 per day for wilful programme failures and $100,000 per reporting violation, with one compliance officer facing a theoretical $4.75m penalty accrued over 190 days.
The wider enforcement machine is running hot. Financial institutions filed a record 4.6 million SARs in FY 2023 alongside 20.8 million Currency Transaction Reports, and 85.7% of IRS-referred prosecutions were supported by BSA filings. In 2024, US regulators issued nearly 50 AML enforcement actions, representing 95% of global AML penalties by value at approximately $4.6bn.
RIAs must now implement written policies “reasonably designed” to prevent money laundering, appoint an AML compliance officer, train staff and commission independent testing. While a formal Customer Identification Program rule is expected in a future joint rulemaking with the SEC, regulators have made clear they expect best practice now. Firms whose marketing materials reference AML safeguards must ensure those claims match reality, a lesson the Navy Capital case delivered emphatically.
Compliance platform Luthor argues its AI-driven system can help, continuously scanning marketing materials across websites, emails and social media to catch potential compliance issues before they escalate.
Read the full Luthor post here.
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