FinCEN Delays AML Requirements for Investment Advisers
FinCEN’s decision to delay its new anti-money laundering requirements for investment advisers is not a free pass to stand down. It’s a two-year window to get your house in order.
On July 21, 2025, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that it intends to push back the effective date of the Investment Adviser AML Program Rule from January 1, 2026 to January 1, 2028, and to reopen the rule for further tailoring. Dechert’s analysis of the move underscores just how significant that pause is: after two decades of fits and starts, Treasury is hitting the brakes, promising to refine the rule’s scope and reconsider the related Customer Identification Program (CIP) proposal that would apply to SEC-registered investment advisers and exempt reporting advisers.
To recap the journey so far: in February 2024, FinCEN proposed a rule that would formally bring SEC-registered investment advisers and exempt reporting advisers into the Bank Secrecy Act (BSA) framework, requiring them to establish AML/CFT programs and file Suspicious Activity Reports (SARs). In May 2024, FinCEN and the SEC followed with a joint CIP proposal that would have required advisers to verify the identities of customers opening accounts, similar to existing bank-style CIP obligations. These rules were widely viewed as closing a long-criticized gap in the U.S. AML regime for the advisory sector.
Now, Treasury says it wants to “appropriately balance costs and benefits” and tailor the adviser rule to the “diverse business models and risk profiles” across the industry. FinCEN has committed to issuing exemptive relief that formally pushes the effective date to January 1, 2028, and to revisiting both the AML Program Rule and the CIP proposal through new rulemaking.
On the surface, that sounds like a reprieve. In reality, it is better understood as a reset.
While implementation timelines are slipping, enforcement is not. Dechert notes that AML and sanctions enforcement activity has intensified, with a particular focus on cross-border risks, non-U.S. financial institutions, and private funds as an attractive entry point for illicit money. FinCEN’s recent designations under the FEND Off Fentanyl Act and DOJ’s enforcement guidance send the same message: the government may be slowing new rules, but it is not easing expectations around detecting and reporting suspicious activity.
For advisers and private fund managers, that creates a tricky tension. On one hand, the legal obligation to comply with the Investment Adviser AML Rule has been postponed. On the other, regulators have already laid out their view of the sector’s risks and made clear they expect robust controls, even before the rule is fully live.
This is exactly where GiGCXOs comes in.
Through our AICompliance360 frameworks, we help SEC-registered advisers and exempt reporting advisers treat this two-year delay as an opportunity to build something durable, not as an excuse to defer.
We start with a gap and readiness assessment against the likely contours of an adviser AML program. That includes reviewing how you currently identify and risk-rate clients and investors, what data you collect about beneficial owners and controllers, how you screen against sanctions and watchlists, and how you document and escalate potential suspicious activity. For private fund advisers, we pay particular attention to subscription documents, side letter processes, placement agent relationships, and cross-border fundraising channels, all of which can raise elevated AML risk.
From there, we help design a scalable AML framework that can grow into whatever final rule FinCEN adopts. That means written AML policies that align with BSA concepts—customer due diligence, ongoing monitoring, SAR-like escalation—even if the formal SAR obligation is delayed. It means defining clear roles for the CCO, AML officer, front-office teams, and fund administrators, and making sure those responsibilities are realistically matched to your firm’s size and resources.
On the technology side AICompliance360 allow firms to centralize KYC information, ongoing screening, and case management instead of spreading AML-relevant data across email, spreadsheets, and siloed administrator portals. We can help you build practical workflows so that new investor onboarding, negative news reviews, and periodic recertifications all live in a single, auditable system that will stand up when examiners ask, “Show us how you know your investors.”
Finally, we help firms future-proof their programs. The reopened rulemaking process will produce new drafts, comment letters, and likely refinements to who is covered and how CIP is supposed to work for advisory relationships. GiGCXOs stays on top of those developments and updates your program design, templates, and playbooks so you are not starting from scratch with each new notice of proposed rulemaking.
The bottom line is simple: FinCEN’s delay buys time, not safety. Advisory firms that use the next two years to build practical, right-sized AML programs will be far better positioned when the revised rule drops—and far less vulnerable to enforcement in the meantime.
GiGCXOs can help you turn this regulatory pause into a strategic advantage, by building an AML framework that reflects your real risk profile, leverages modern technology, and is ready to plug into the final Investment Adviser AML Rule and CIP requirements the moment they become law.
