Reported by Jennifer Trowbridge

Certain registered investment advisers (RIAs) and Exempt Reporting Advisors (ERAs) will face new federal compliance and filing requirements in the new year. Starting January 1, 2026, they will be required to comply with Financial Crimes Enforcement Network’s (FinCEN’s) new anti-money laundering (AML) and countering the financial terrorism (CFT) regulation.

This is considered a fundamental shift in the industry and many RIAs and ERAs’ existing voluntary programs and processes don’t meet the new requirements. Advisers defined under the rule, will have very similar requirements that other financial institutions, including broker-dealers, have with respect to AML programs. Impacted advisers should be actively assessing their current compliance programs and beginning to make the necessary adjustments.

In this final rule, FinCEN includes certain investment advisers in the definition of “financial institution” under the Bank Secrecy Act (BSA), and prescribes minimum standards for AML and CFT programs to be established, among other things.

Exempt Advisers

The new rule applies to SEC registered investment advisers and ERAs that report information to the SEC, but the rule excludes the following:

• Mid-sized advisers ($25 million to $100 million assets under management);
• Multi-state advisers;
• Pension consultants; and/or
• RIAs that do not report any assets under management on Form ADV;
• State-registered advisers;
• Foreign private advisers; and/or
• Family offices.

Read full report: https://www.procopio.com/resource/fincen-investment-advisers