Alex Rees
5 Nov 2025
On 21 October 2025, HM Treasury announced one of the most significant anti-money-laundering (AML) reforms in recent years. Following its consultation on the future of AML and counter-terrorist-financing (CTF) supervision, the government confirmed that the Financial Conduct Authority (FCA) will serve as the Single Professional Services Supervisor (SPSS). This decision marks a major shift in how AML/CTF compliance will be managed across the legal, accountancy, and trust and company service provider (TCSP) sectors.
The change is designed to simplify the UK’s fragmented supervisory system, which currently involves 23 separate supervisors, including HMRC and various professional bodies. Once implemented, the SPSS model will bring professional services under a single public body for AML oversight, aligning them with sectors already supervised by the FCA, the Gambling Commission, and the Prudential Regulation Authority. This aligns with the UK’s broader Economic Crime Plan 2, which aims to strengthen economic crime prevention and improve cross-sector collaboration.
Why Did HM Treasury Choose the SPSS Model?
HM Treasury’s decision followed detailed analysis of responses from 95 stakeholders, including professional bodies, law firms, and accounting organisations. The consultation response outlined the government’s rationale: the SPSS model will improve consistency, strengthen enforcement, and enable better data sharing across sectors.
Under the previous framework, AML supervision varied significantly between professional bodies. Feedback from respondents highlighted inconsistent expectations, fragmented data collection, and limited transparency in enforcement actions. Consolidating supervision under the FCA, a public body with existing regulatory infrastructure and AML expertise, is expected to create a more coherent system.
The government considered several alternatives, including enhanced oversight through the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), but ultimately concluded that a single supervisor model would deliver greater efficiency and accountability. The FCA’s existing AML framework also provides a tested foundation for scaling AML supervision across professional services.
How Will the SPSS Model Work?
Once implemented, the Single Professional Services Supervisor (SPSS) will oversee AML/CTF compliance for roughly 60,000 regulated firms across the legal, accountancy, and TCSP sectors. Firms currently supervised by professional-body supervisors or HMRC will transition to FCA oversight.
The FCA will apply a risk-based AML supervision model, prioritising higher-risk firms for closer scrutiny. This approach will align professional services with other financial sectors already under FCA supervision, allowing for more consistent monitoring and enforcement.
Key features of the new model include:
Unified supervision under a single public body
Centralised data collection and risk analysis
Enhanced intelligence sharing between regulators and law enforcement
A new FCA-managed fee structure replacing 23 existing systems
While the FCA will oversee AML/CTF compliance, firms may still have separate conduct regulators such as the Solicitors Regulation Authority (SRA) or the Institute of Chartered Accountants in England and Wales (ICAEW). This creates potential dual regulation complexities, requiring coordination between conduct and AML oversight bodies.
For firms using modern watchlist management or customer screening solutions, this consolidation could streamline compliance workflows by integrating consistent regulatory requirements into a single supervisory model.
What Are the Benefits and Challenges of Consolidating AML Supervision?
The SPSS model offers several advantages for both firms and regulators:
Consistency: Uniform expectations for AML compliance across professional service sectors.
Efficiency: Streamlined reporting and reduced duplication of supervisory roles.
Transparency: Clearer accountability through a single public regulator.
Risk-Based Approach: Resources focused on high-risk firms and sectors.
However, the reform will not be without challenges. Transitioning thousands of firms to FCA supervision will require new systems, staff training, and potentially different data-reporting templates. The FCA will need to balance its expanded mandate with maintaining focus on high-risk sectors. Smaller firms could also face higher compliance costs under a more rigorous supervisory model.
These challenges can be mitigated through automation and data-driven solutions. Firms adopting tools for payment screening and alert adjudication can automate parts of their compliance processes, reducing manual workload and improving accuracy in risk-based decision-making.
How Does This Reform Fit Into the UK’s Broader Economic Crime Strategy?
The creation of the SPSS supports the UK’s Economic Crime Plan 2 and builds on legislative reforms like the Economic Crime and Corporate Transparency Act, which strengthened Companies House powers and enhanced transparency in corporate ownership.
By consolidating professional services AML supervision, the government aims to close gaps exploited by criminals who misuse legal and accountancy structures for money laundering. The FCA’s established data analytics and enforcement capabilities will help ensure more effective prevention and detection of financial crime.
This reform also signifies the replacement of OPBAS, which previously coordinated between supervisors but lacked direct enforcement powers. The SPSS model gives the FCA full authority to investigate and act on AML/CTF breaches, representing a significant evolution in UK regulatory design.
For a deeper look at how data governance supports effective compliance, see our insight on applying data management to sanctions screening.
What Should Firms Do to Prepare for the FCA AML/CTF Supervision Transition?
The transition to FCA supervision will take time and depend on enabling legislation and parliamentary scheduling. HM Treasury has indicated that implementation will be phased, allowing firms to adjust gradually.
Firms should begin preparing now by:
Reviewing governance frameworks - Ensure AML oversight, accountability, and risk assessments align with FCA expectations.
Monitoring legislative updates - Stay informed through HM Treasury updates and industry guidance.
Engaging with professional bodies - Collaborate with trade associations to align on new supervisory requirements.
Investing in AML systems and automation - Adopt tools that enhance continuous screening and audit traceability.
Training compliance teams - Educate staff on reporting obligations and governance changes.
By adopting solutions like customer screening and watchlist management, firms can automate key parts of their AML processes, improving readiness for FCA supervision.
What Does the SPSS Reform Mean for the Future of Professional Services?
The FCA's appointment as the Single Professional Services Supervisor marks a defining moment for the UK’s approach to financial crime prevention. Beyond regulatory consolidation, this reform signals a deeper cultural transformation: professional services firms are now being positioned alongside major financial institutions as critical gatekeepers against illicit finance.
In practice, this means a shift from static compliance to dynamic risk intelligence. The FCA’s oversight will likely push firms to adopt advanced analytics, machine learning, and automated data pipelines to predict and prevent suspicious behaviour before it escalates. Firms that invest early in these capabilities can evolve their compliance functions into strategic assets that deliver competitive advantage through operational efficiency and stronger client trust.
The SPSS model also offers a blueprint for data-driven regulation. As the FCA integrates data from legal, accountancy, and TCSP sectors, it can generate more holistic risk profiles and identify systemic threats faster. This opens the door to predictive regulation, where insights drive both prevention and policy reform. For example, deploying transaction monitoring systems integrated with alert adjudication tools can help firms detect anomalies in real time and respond with audit-ready precision.
Internationally, this move positions the UK as a thought leader in risk-based AML supervision, setting a precedent for how professional services regulation can evolve in other jurisdictions. The ability to merge supervision, enforcement, and intelligence within one public body could inspire similar models across the EU and Commonwealth nations. This aligns with the broader ambitions of the UK’s Economic Crime Plan 2 to deliver smarter, technology-enabled financial regulation.
For compliance leaders, this is an inflection point. The SPSS reform is not just about aligning with a new supervisor; it’s about rethinking how technology, governance, and culture intersect to combat economic crime in a more connected and data-rich world. Firms can explore related insights in our AML for fintechs, and AML for payment service providers pages to understand how automation and intelligence-led compliance are shaping the future of regulated sectors.
How Firms Can Strengthen AML Compliance Ahead of the SPSS Transition
As the UK transitions to the FCA-led Single Professional Services Supervisor model, now is the time for legal, accountancy, and TCSP firms to strengthen their AML and CTF frameworks. Upgrading to solutions that automate watchlist management, enable continuous customer screening, and enhance payment screening can help organisations stay compliant while reducing manual effort.
Facctum’s technologies support real-time data ingestion, alert adjudication, and audit-ready reporting, helping firms meet evolving FCA expectations with confidence. By preparing early, your organisation can not only simplify compliance but also gain a competitive advantage in demonstrating proactive risk management and governance.
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