Wealth & investment
Wealth managers, private banks, discretionary and advisory investment firms are supervised by the FCA and held to the JMLSG Part II sector-specific standard, with particular focus on source of wealth and PEP frameworks.
Where the regime bites
The sector's client base — high-net-worth individuals, family offices and trust structures — presents a concentration of the risk factors that trigger enhanced due diligence: PEP status, complex ownership, high-value cross-border flows and reputation-sensitive relationships.
The FCA's Financial Crime Thematic Reviews (TR11/7, TR14/16 and subsequent Dear CEO letters) remain the working benchmark for supervisory expectations on source of wealth, ongoing monitoring and periodic review in wealth management.
What supervisors expect
Corroborated SoW narrative for high-risk and PEP relationships, refreshed at defined intervals and on trigger events (large deposit, new mandate, change of beneficial ownership).
Risk-based application of EDD to PEPs, family and close associates, with proportionality mechanisms for domestic PEPs as clarified in FG17/6.
Ongoing monitoring aligned to Regulation 28(11), with periodic review cycles calibrated to relationship risk rather than fixed to a calendar schedule alone.
Alignment between suitability assessments and AML risk profile so that unexpected transactions and inconsistent narratives are triaged.
Recurring risk indicators
- Complex trust and foundation structures
- Offshore custody and multi-jurisdictional mandates
- Politically exposed persons and close associates
- Introduced business from higher-risk intermediaries
- Concentrated single-asset wealth of uncertain origin
Advisory support for the sector
- PEP and high-risk client file review
- Source of wealth framework design
- Independent MLRO cover
- Thematic remediation programmes