FinCEN formally delays RIA money laundering rule amid industry pressure

The Financial Crimes Enforcement Network has formally postponed the compliance deadline for its anti-money-laundering and counter-terrorist financing rules applicable to registered investment advisors and exempt reporting advisers.

The rule was originally slated to take effect at the start of this year but has now been rescheduled to apply beginning January 1, 2028, under a final rule published in the Federal Register by FinCEN on January 2.

The amendment, codified under document number 2025-24184, alters the Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for RIAs and Exempt Reporting Advisors (IA AML Rule).

The final rule specifies that the date by which covered advisors must develop and implement an AML/CFT compliance program is now January 1, 2028, effectively pushing back the compliance timeline by a full two years from the original date.

FinCEN’s rationale for the change acknowledges industry concerns and the challenges advisors face in preparing for these complex compliance requirements. The Federal Register notice explains that the delay “will provide additional time for FinCEN to review the IA AML Rule and, as applicable, ensure the IA AML Rule is effectively tailored to the diverse business models and risk profiles of types of firms within the investment adviser sector.”

The regulatory revision follows substantial industry feedback on the earlier proposed delay with supporters highlighting the significant planning, operational and resource demands associated with establishing a compliant AML/CFT program. One industry commentator stressed that building such a program “is a complex, multi-year process that requires significant planning, budgeting, and coordination,” reflecting widespread sentiment that the original timeframe risked imposing undue burdens.

However, not all stakeholders welcomed the postponement. Transparency organizations and other critics have voiced strong opposition, warning that pushing back the implementation date could extend gaps in US AML coverage and potentially leave the financial system more vulnerable to misuse by illicit actors, including sanctioned individuals and foreign adversaries. They argued that the already generous lead time since the rule’s 2024 finalization should have been sufficient for advisors to prepare.

However, FinCEN says that the delay will allow it to synchronize the effective date with other related regulatory efforts, including potential revisions to customer identification program rules and joint initiatives with the Securities and Exchange Commission. This coordinated approach is expected to give advisors a clearer, unified set of expectations under the broader Bank Secrecy Act framework.

From an economic perspective, FinCEN noted that the revised implementation schedule may ease near-term compliance costs for advisors, estimating that the delay could translate into substantial cost savings by deferring certain expenditures. At the same time, the agency assessed that the postponement strikes a balance between mitigating regulatory burden and maintaining effective safeguards against financial crime.