UK FCA findings on asset management and alternative firms' financial crime controls

The UK Financial Conduct Authority (FCA) has published the findings from its review of financial crime systems and controls across asset management and alternative firms. In 2025/26, the FCA engaged with 242 asset management and alternatives firms to gather firms' own assessments of the financial crime risks they face and to understand their control frameworks. The FCA has summarised its main findings, including examples of good and poor practice. It also reminds firms of the FCA's expectations. The FCA's findings centre on how well firms: (i) understand their inherent financial crime risk; and (ii) identify, mitigate and manage financial crime risk (control risks). The review covered a range of business models, and the FCA notes that not all findings will be applicable to all firms given the diversity of the sector. The review is part of the FCA's wider financial crime supervisory work in support of its 2025–30 strategy and supervisory priorities for the sector.

The FCA found that:

• Inherent risks—some firms were exposed to heightened financial crime risks, especially those firms active in private markets, due to factors such as complex ownership structures, higher-risk customers and international fund flows. The FCA expects firms that face higher financial crime risks to have established frameworks and appropriate controls to mitigate these risks, as referenced in the Money Laundering Regulations 2017 (MLRs) and Senior Management Arrangements, Systems and Controls (SYSC) section of the FCA's Handbook.
• Control risks—most firms showed they understood legal and regulatory requirements through their control framework, but others appeared to underestimate their inherent financial crime risks, resulting in an informal approach to evaluating and managing them. The FCA sets out examples of good and bad practice relating to business-wide risk assessments, customer risk assessments, customer due diligence and enhanced due diligence, ongoing monitoring, screening, governance and training. In some instances, the FCA states that the findings were concerning and will require firms to review their financial crime frameworks to ensure they are adequately identifying, managing and mitigating the risks to which they are exposed.

The FCA encourages firms to consider its findings in the context of their own business model and activities and continue to address any gaps in their financial crime control frameworks. The FCA will continue to monitor firms through its supervisory work to make sure they are considering the points raised in this review to drive improvements.

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