The expanded obligations will take full effect on 1 July 2026. This comes at a time when advice firms are already being weighed down by compliance obligations across the board.
According to Kit Legal founder and head of legal Catherine Evans, the greatest risk emerges when advisers assume their role keeps them in a limited scope of AML/CTF where only the licensed entity is regulated.
“I still hear advisers say I’m just setting up the structure, or I’m just the adviser,” she said.
“That distinction is becoming increasingly irrelevant. If you are facilitating the establishment of companies, trusts, transactions or the movement of money, you are part of the controls ecosystem.”
Existing reporting entities, including self-licensed advisers, have operated under the new framework since 31 March.
Before this, self-licensed advisers operated under a reduced scope known as Item 54, where only the licensed entity was providing designated services and required to enrol with AUSTRAC. But from 1 July, new designated services and new reporting entities come into the regime in full.
Evans stated AUSTRAC’s expectations are already far higher than many within the advice profession have appreciated, with the new designated services capturing many corporate authorised representative entities that were previously outside the regulatory scope.
A sensible starting point, according to Evans, is knowing which services are regulated, and this is where most firms underestimate the complexity:“The designated services are worded broadly, and AUSTRAC’s guidance does not always map neatly to how advice businesses operate.
“If you recommend an SMSF and refer the client to their accountant, you are likely not providing a designated service. But if you facilitate the set-up, by completing forms or using a document provider, then you almost certainly are.”
Evans added that holding authority over a client’s account to make payments, or providing a registered office address, are each designated service in their own right.
“None of these are unusual arrangements in an advice practice,” Evans said.
“They are everyday occurrences, and precisely the kinds of services this regime is designed to capture.”
According to Evans, advice businesses with associated accounting arms may find both entities are captured under the regime and required to enrol with AUSTRAC individually. Corporate authorised representatives providing designated services may also need to register in their own right, rather than relying on the licensee’s enrolment.
“The days of assuming the licensee handles all of this are gone,” Evans said.
Once a firm is captured by the regime, the compliance burden extends well beyond registration. Businesses may be required to undertake money laundering and terrorism financing risk assessments, implement policies and controls, conduct staff due diligence and training, establish governance frameworks and provide annual reporting to AUSTRAC.
For Evans, the most common mistake for advisers is treating these new compliance requirements as a documentation exercise.
“A policy gets written, filed away, and never touched again. But the framework only holds up when it is embedded in how the business operates,” she stated.
“What does the team do day to day? How are concerns escalated? How are decisions recorded? That is what AUSTRAC, and an independent evaluation, will examine.”
Kit Legal also warned this issue should not be treated as a compliance “set-and-forget”, reminding advisers that due diligence must be maintained throughout the client relationship, and any suspicious activity needs to be reported within three business days of it occurring.
Evans warned that even firms with low-risk client bases remain fully subject to the new AML/CTF obligations, arguing this is where many advice businesses risk falling short.
With the 1 July deadline looming, she said advisers should focus on demonstrating compliance rather than relying on their familiarity with clients.
“When the questions come, confidence will not come from knowing your clients well. It will come from being able to show your workings,” Evans said.
