A recent Citywire article highlights how investment platforms are tightening anti-money laundering (AML) controls as regulatory expectations continue to rise. Increasingly, firms are moving away from the traditional “reliance on others” model, where advisers conduct client due diligence, towards undertaking their own customer verification checks. 

Historically, many platforms operated under a “reliance on others” model, where financial advisers were responsible for verifying client identities, assessing financial crime risks and conducting source-of-wealth checks. However, Citywire reports that a growing number of platforms are moving towards a “non-reliance” approach, undertaking their own customer due diligence and identity verification checks when onboarding investors. 

The article points to SS&C Hubwise’s transition to a non-reliance model, including enhanced identity verification and AML screening for clients. Compliance experts quoted by Citywire note that while reliance models can still work, they require strong oversight, monitoring and clear accountability.  

For firms across financial services, the development reinforces the importance of demonstrating effective financial crime controls, robust governance and visibility over customer due diligence processes as regulatory scrutiny continues to evolve. 

Joe Norburn, CEO at TCC Group, comments: “The strongest operating models are likely to be those where advisers, platforms and technology providers each contribute intelligence and oversight, rather than treating financial crime prevention as somebody else’s responsibility.”