FCA says legal and accounting firms will not be caught out on AML supervision

What happened

Steve Smart, Executive Director of Enforcement and Market Oversight at the Financial Conduct Authority (FCA), addressed the Law Society Economic Crime Conference on Thursday, 17 September 2026. Smart said UK law firms should not expect to be “caught out” when the FCA takes over anti-money laundering (AML) supervision of the sector, a transfer due in roughly two years.

The FCA is set to take on AML supervision of 60,000 entities across the legal and accounting sectors, with the transfer scheduled for the end of 2028. That shift replaces the current patchwork of sector-specific supervisors with a single, risk-based regulator overseeing both professions.

The FCA said it has “the expertise, technology and intelligence-led approach needed to supervise the sectors effectively.” Smart also said the regulator will be looking to take down “professional enablers.”

Why it matters

Smart’s remarks are analysis-worthy mainly for what they signal about tone, not substance. A senior enforcement official using reassurance language this far ahead of a supervisory handover suggests the FCA anticipates concern within the legal sector. The likely worry: a more assertive AML supervisor replacing sector-specific bodies accustomed to a lighter touch.

The reference to “professional enablers” points to where the FCA’s priorities likely sit once it holds the mandate. This suggests enforcement attention will concentrate on firms and individuals seen as facilitating money laundering, rather than on the wider population of law firms handling routine client work.

The two-year runway matters because it gives firms time to adjust before the FCA’s standards apply, but the substance of those standards has not yet been detailed in what is captured here. The likely effect is a supervisory approach modeled on how the FCA already supervises AML for regulated financial firms, though that comparison is inference, not confirmed FCA policy.

Practitioner angle

• Law firm MLROs (money laundering reporting officers) and compliance leads should begin mapping their current AML supervisor’s expectations against how the FCA supervises AML for its existing regulated population, since the FCA’s supervisory style, not just its rulebook, is likely to carry over.
• Track FCA public statements and consultations on the professional services AML transfer over the next two years; Smart’s conference remarks are the kind of early signal that often precedes formal guidance.
• Review whether “professional enabler” typologies, meaning advisers or intermediaries whose services are used to facilitate laundering, could describe any part of your client base or referral network, and check onboarding and ongoing due diligence controls accordingly.
• Accounting firms sit inside the same 60,000-entity transfer. Treat this timeline identically to law firms since the reform is sector-wide, not law-specific.

The single most important thing to do: start tracking the FCA’s professional services AML transfer program now, rather than waiting until closer to the end of 2028, so control changes are not built under deadline pressure.