Financial institutions, including broker-dealers, are subject to anti-money laundering regulations. These regulations help prevent financial crimes and related criminal acts, such as terrorism. Hiring an anti-money laundering analyst is something you might consider if you’re concerned about your firm’s risk exposure to such activity.
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Anti-Money Laundering Regulations and Financial Advisors
The Bank Secrecy Act establishes the rules and regulations that govern the recordkeeping and tracking of financial transactions for covered institutions. Entities that are subject to Bank Secrecy Act rules must aid the government in detecting money laundering by:
- Reporting cash transactions of $10,000 or more that take place within a single account, in a single day
- Documenting cash purchases of negotiable instruments, such as money orders
- Promptly reporting any suspicious activity that may suggest a financial crime has occurred or will occur, including money laundering
Historically, these rules have applied primarily to banks. In 2024, the Financial Crimes Enforcement Network (FinCEN) announced a rule change that would extend AML requirements to registered investment advisors. The new rule requires advisors to adhere to anti-money laundering as well as the Countering the Financing of Terrorism (CFT) requirements beginning on January 1, 2026.
Financial advisors are also subject to Know Your Client (KYC) rules under the Bank Secrecy Act. These rules are designed to ensure that advisors know who they’re working with when entering into a client relationship.
Under KYC rules, advisors must:
- Obtain appropriate documentation to verify clients’ identities
- Identify clients who may be at higher risk for suspicious activity
- Take additional steps to perform due diligence for clients perceived as being at higher risk
FinCEN enforces the Bank Secrecy Act, including Know Your Client rules.
What Does an Anti-Money Laundering Analyst Do?
Anti-money laundering analysts monitor financial transactions to detect suspicious activity and prevent the commission of financial crimes. They’re responsible for:
- Analyzing data to look for indicators of money laundering, including unusual patterns of behavior or anomalies in the numbers
- Reporting suspicious financial activity to the appropriate law enforcement agencies, regulatory agencies and in-house compliance officers
- Monitoring trends in financial crime to identify new tactics or techniques criminals may use to launder money
AML analysts work in a highly specialized role, and they may be employed by banks, financial advisors, government agencies and other entities that deal in financial transactions.
Anti-Money Laundering Analyst vs. Anti-Money Laundering Compliance Officer
Anti-money laundering analysts and AML compliance officers perform distinct roles within a financial organization. While analysts primarily focus on identifying risks and detecting suspicious activity, AML compliance officers ensure that financial institutions comply with AML regulations.
An AML compliance officer’s scope of responsibilities extends to:
- Developing and implementing tailored AML/CFT plans for financial institutions, including registered investment advisors and broker-dealers
- Monitoring the regulatory landscape to identify emerging risk trends and stay up to date on the latest compliance rule changes
- Conducting detailed risk assessments for the organizations they work for to identify unique threats and adjusting the organization’s AML/CFT plan accordingly
- Performing ongoing client due diligence to detect signs of suspicious activity that may indicate crimes such as money laundering or terrorism
- Training appropriate persons within an organization to ensure they understand AML regulations and the compliance policies they’re expected to follow
An anti-money laundering compliance officer can also act as a bridge between your firm and other entities that you may need to communicate with regarding AML regulations. For example, if you plan to hire an independent agency to conduct an audit of your AML plan, your compliance officer would make those arrangements on your behalf.
If you have both an AML analyst and an AML compliance officer working for your firm, the analyst would be subordinate to the compliance officer.
When to Hire an Anti-Money Laundering Analyst
Hiring an AML analyst could make sense in situations where you’re concerned about detecting money laundering activity.
For example, you might hire an AML if you:
- Are onboarding a new client who is bringing a sizable amount of assets under your management
- Doubt the authenticity of financial information that a client relates to you, or are working with a client who appears to be reluctant to share information
- Have concerns that a client may be engaging in money laundering, fraud or related criminal acts, including terrorism
You may hire an AML analyst to fill a permanent role or work in a temporary position.
How to Choose an Anti-Money Laundering Analyst for Your Firm
If you’ve decided to hire an anti-money laundering analyst, it’s important to find the right person. Here are some of the most important criteria to consider:
- Education and whether they hold degrees in finance, accounting or a relevant field
- Certifications and designations they might have, including the certified anti-money laundering specialist (CAMS) certification
- Experience and the number of years they’ve worked in the advisory, finance or banking industry
It’s also helpful to weigh hard and soft skills in the balance. Some of the most important skills an AML analyst needs to have include:
- Research skills
- Analytical skills
- Organizational and time management skills
- Interpersonal skills
- Communication skills
Strength in these areas can help to counterbalance a shorter employment history or the lack of a CAMS certification.
Frequently Asked Questions (FAQs)
Do Broker-Dealers Need to Hire an AML Analyst?
A broker-dealer may choose to hire an AML analyst if they suspect money laundering or would like a detailed risk assessment of a new client’s background. Broker-dealers are required to have a designated person who handles AML compliance, which is distinct from the duties of an anti-money laundering analyst.
Do RIAs Need to Hire an AML Analyst?
Beginning in 2026, certain registered investment advisors will be subject to the same AML regulations and reporting requirements as broker-dealers. That means they’ll need to appoint or hire an AML compliance officer. Hiring an AML analyst is not required, though it’s something an RIA might do if they have concerns about clients being involved in criminal financial activity.
When to Hire an AML Compliance Officer?
FinCEN rules require broker-dealers to have an anti-money laundering compliance officer. Beginning in 2026, certain RIAs will need to meet the same requirement. If you’re subject to the upcoming rule change, you’ll need to appoint someone in-house or hire someone externally to fill the AML compliance officer role.
Bottom Line
Anti-money laundering analysts help advisors and other financial institutions to root out suspicious activity and deter financial crimes. Whether you need to hire an AML analyst may depend on the types of clients you work with and the internal safeguards you have in place to prevent money laundering activity.
Tips for Growing Your Advisory Business
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- The SEC requires registered investment advisors to have a chief compliance officer. If you’re running a smaller boutique firm, you might fill this role yourself. If you’re working on expanding your business, it could make sense to hire a CCO so that you have more time to spend with clients. You can make your CCO’s job easier by adding compliance software to your RIA tech stack.
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