On July 21, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a significant delay to the compliance deadline for its long-awaited anti-money laundering (AML) rule applicable to certain investment advisers. Originally set to take effect on January 1, 2026, the rule’s new effective date is January 1, 2028. In the meantime, FinCEN has indicated it will reconsider the scope and requirements of the rule, along with a jointly proposed Customer Identification Program (CIP) rule developed with the U.S. Securities and Exchange Commission (“SEC”).

What Was the Rule?

The AML rule, published in September 2024, would have applied to the following:

SEC-registered investment advisers (with regulatory assets under management); and
Exempt reporting advisers (ERAs) under the Investment Advisers Act of 1940.

The AML rule did not cover the following type of firms:

State-registered investment Advisers;
SEC registered investment advisers which do not report assets under management on Form ADV;
SEC registered investment advisers which register with SEC solely due
- mid-sized adviser ($25M – $100M),
- multi-state adviser, or
- pension consultant;
Advisers qualifying for foreign private adviser exemption; and
Family office advisers (to single family) not required to register with SEC.

The AML required covered investment advisers to implement formal AML programs consistent with Section 352 of the USA PATRIOT Act, which includes:

Written policies and procedures;
Appointment of a dedicated AML Compliance Officer;
Independent testing;
Ongoing employee training;
Suspicious Activity Report (SAR) filing; and
Recordkeeping obligations under the Bank Secrecy Act (BSA).

Although this rule mirrored the structure applied to broker-dealers since 2002, it posed considerable implementation challenges for investment advisers – especially smaller firms that have never been subject to formal AML obligations.

Why the Delay?

FinCEN cited the need to ensure that the final rule is “effectively tailored to the diverse business models and risk profiles” in the investment adviser space and “balances regulatory obligations with operational realities.” The agency also committed to re-engaging with industry stakeholders to refine the rule’s scope before enforcement begins.

The delay comes after extensive feedback from trade groups and compliance professionals requesting longer timelines and more targeted obligations – particularly for investment adviser firms that do not custody client funds or offer direct wire transfer capabilities.

What This Means for Firms Without an AML Program

If your investment adviser firm has never implemented an AML program, this delay provides a window of opportunity—but not an excuse for inaction. Here’s how to proceed strategically:

Assess your firm’s AML risk exposure

Even without a formal obligation under federal AML regulations, your investment adviser firm may be exposed to the following:

Third-party custodian inquiries;
Institutional investor due diligence;
State regulatory examinations (which may look for AML policies as best practice); and
Legal liability for failure to detect suspicious activity.

Start foundational AML planning

This is a prime opportunity to begin developing scalable AML infrastructure:

Identify potential red flags in your business model (e.g., foreign clients, high-risk asset classes, frequent client withdrawals);
Draft an AML policy that could be expanded upon once final regulations are clarified;
Designate a compliance officer or team to monitor developments; and
Familiarize your team with basic SAR red flags and transaction monitoring concepts.

Monitor regulatory developments and engage with the process

FinCEN has announced plans to issue temporary exemptive relief and reopen the comment period. At that point, your investment adviser can provide comments. The updated rule could result in the following:

Narrow which types of advisers are covered;
Adjust AUM or client thresholds; and
Modify expectations for dual registrants or sub-advisers.

Need a Primer?

RIA Compliance Consultants previously recorded a detailed investment adviser representative continuing education (“IAR CE”) course on the original AML rule for investment advisers, which provides helpful insight into the structure and logic of the initial regulation – even if coverage or elements may change. Watch the course here.

What Comes Next?

We are closely tracking all FinCEN updates regarding the AML rule for investment advisers. To stay informed, sign up for our newsletter or contact us for support in preparing your firm’s AML program.

Related Resources

Disclaimer and Disclosure

This regulatory alert is a summary which is general in nature and offered only for educational purposes. There is no warranty associated with this regulatory alert. It should not be considered as a comprehensive review or analysis of this development. There are certain requirements and exceptions outlined in the rule which are not covered in this regulatory alert. There may be additional obligations and nuances not covered here. Each investment adviser firm is unique, and specific guidance may be required to address your firm’s circumstances. This communication is not intended to constitute compliance consulting advice or apply to any particular investment adviser firm’s specific situation without further analysis. This regulatory alert is not a safe harbor or a legal opinion. Merely reading this regulatory alert does not create an engagement with RIA Compliance Consultants, Inc. The reader should study the actual guidance, rule or enforcement action in detail and consult with his or her compliance professionals. This information in this regulatory alert may become out of date.

AML Rule for Investment Advisers Delayed

July 26, 2025

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