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Investment Adviser FinCEN Rule Services

Navigating the New FinCEN Investment Adviser Rule

AML/CFT Program Implementation Date: January 1, 2026

The Financial Crimes Enforcement Network (FinCEN) has issued a landmark final rule that redefines certain investment advisers (IAs) as “financial institutions” under the Bank Secrecy Act (BSA). This new rule imposes stringent anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements on registered investment advisers (RIAs) and exempt reporting advisers (ERAs). With the compliance deadline approaching on January 1, 2026, it’s crucial for investment advisers to start building out their AML programs now to avoid penalties for noncompliance.

At K2 Integrity, we are actively working with investment advisers of all sizes and business models to navigate and manage compliance with these new AML/CFT requirements. Our comprehensive services may include policy and procedure support, training on the AML requirements of the final rule, and establishing robust processes and controls. We are committed to providing investment advisers with the knowledge and tools they need to meet these new compliance requirements without disrupting their operations.

FinCEN’s final rule aims to address illicit finance threats and vulnerabilities specific to the investment adviser industry that were highlighted in the 2024 Investment Adviser Risk Assessment, including:

fincen rule investment advisers compliance requirements

Firms have until January 1, 2026 to comply with the final rule. This timeline allows advisers to develop and implement the necessary policies, procedures, and controls. IAs should be taking immediate measures to assess the applicability of the final rule to their business and the effort associated with achieving full compliance by the effective date of the regulations. This should include determining an implementation timeline, reviewing current state operational processes (e.g., know-your-customer (KYC) measures), and identifying gaps.

aml compliance timeline january 2026

Where K2 Integrity Can Help – Our Services

01

Regulatory Readiness & Gap Assessments

  • Conduct AML/CFT and sanctions readiness assessments to assess inherent FCC risk and existing FCC controls to determine your firm’s residual FCC risk.
  • Following the assessment exercise, conduct a more detailed gap assessment of your firm’s compliance controls to pinpoint any additional areas for improvement, if any.

02

Implementation of AML/CFT Program Pillars

  • Develop and implement policies and procedures needed to operationalize its AML/CFT Program, including KYC/ CDD, EDD, filing SARs, recordkeeping (CTR and Travel Rule compliance), responding to Section 314(a) requests, and implementing special due diligence measures for certain customer types.
  • Assist your firm in meeting the training obligations by 1) delivering off-the-shelf AML/CFT training modules developed in partnership with K2 Integrity’s strategic training partner, the Institute for Financial Integrity or 2) developing and delivering targeted, specialized training for senior leadership and all staff with FCC responsibilities across AML/CFT, sanctions, relevant red flags, regulatory reporting, and any other AML/CFT program aspects.

03

Managed Services & Investor Due Diligence

  • Deliver comprehensive support in managing compliance operations (e.g., providing outsourced KYC and transaction monitoring alert support).
  • Perform investigative due diligence for the IA on new and existing higher-risk funds/legal entity customers, potential investors, and so on (e.g., to understand beneficial owners of an IA’s clients and investors).

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Ongoing Strategic AML/CFT Program Advisory

  • Led by former government officials and supported by AML/CFT and sanctions industry experts, including with expertise in AML/CFT program design and implementation of controls.
  • Advise IAs on leading AML/CFT practices based on our deep understanding of regulatory expectations including FinCEN’s IA final rule standards (“phone a friend” offering where clients boards can ask bespoke questions regarding implementation of the final rule, other regulatory developments, etc.).

 

In addition, K2 can help firms with the following BSA/AML compliance support efforts:

  • Educating executive leadership on the requirements needed to comply to establish an appropriate “tone from the top” compliance approach.
  • Conducting firm-wide AML training sessions to ensure organizational awareness of compliance obligations.
  • Conducting a readiness assessment to establish the AML requirements that apply to each firm, and customize a program to prepare for future SEC examinations.
  • Advising on industry-leading AML/CFT practices with reference to regulatory expectations, including FinCEN’s IA final rule standards.
  • Establishing strong third-party risk management controls to ensure compliance with the new rule.
  • Developing and implementing AML/CFT policies and procedures required to operationalize AML compliance programs.
  • Delivering comprehensive support in managing compliance operations (e.g., providing outsourced KYC and transaction monitoring alert support).
  • Performing investigative due diligence on higher-risk funds, and of clients, including individual and institutional investors.

Contacts:

More Information About the FinCEN IA Rule

K2 Integrity Resources

External Resources:

K2Integrity Logo 2024

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