Advisers low risk on AML/CTF says FAAA

Mike Taylor

Managing Editor/Publisher, Financial Newswire

27 January 2026

Financial advisers represent a comparatively low risk when it comes to anti-money laundering and counter terrorism financing (AML/CTF) and this should be recognised in increased powers being considered for the chief executive of AUSTRAC, according to the Financial Advice Association of Australia (FAAA).

The Government is proposing to confer greater powers on the AUSTRAC CEO including enabling him/her to restrict or prohibit certain high-risk products, services and delivery channels under the AML/CTF regime.

The FAAA is not opposing the concept of increased powers, but has expressed concern at how they might be used.

In a submission filed with the Department of Home Affairs it said “we are concerned about the fairness of such measures if the scope, criteria and application of this proposal is too broad or too uncertain”.

In doing so, the FAAA suggested it would be helpful to see examples of how the proposed AUSTRAC CEO power might work in practice, “given it is a broad power that can be applied across an entire sector, not just one entity”.

“…if the powers are applied to all designated services, appropriate and clear criteria should be developed to ensure that the proposed powers can only be applied to genuinely high-risk products, services and deliver channels,” it said.

The FAAA said the majority of its members provided only item 54 designated services and therefore arranged for another designated service to be provided by another reporting entity.

“This creates two layers of AML/CTF risk mitigation – the financial adviser and the product provider, for example. This assists in mitigating and managing ML/TF risk,” it said.

“Generally, financial advisers do not recommend products, services or use delivery channels that pose a high ML/TF risk; and the majority of financial advisers’ clients are individuals based in Australia.

“The most challenging ML/TF risk for an advice AFSL holder to mitigate and manage would be collecting enough information to make informed SMRs on people who advisers do not take on as clients due to suspicious behaviour, while also complying with the tipping off provisions.

“We are therefore unable to respond in terms of designated services that pose risks that are difficult to manage and mitigate,” the FAAA’s submission said