The FCA has already started communicating with law firms about the transfer of anti-money laundering supervision. With further engagement planned, firms should make preparation part of their 2027 business plans.
The FCA’s Annual Public Meeting on 6 October 2026 provided an opportunity to ask a practical question: when would the regulator start communicating directly with law firms about the transfer of AML supervision from the Solicitors Regulation Authority?
According to the account of the meeting shared on LinkedIn, the FCA’s answer was that communication had already begun. It had been speaking with the sector and individual law firms, with further events planned to broaden that engagement.
For managing partners, MLROs and those responsible for compliance, that is a useful signal. Preparation should have an owner, a timetable and a place on the management agenda.
FCA communication with law firms has already begun
The FCA’s published information on AML supervisory reform confirms that it has started gathering views from businesses, professional body supervisors and membership organisations. Its engagement includes meetings, workshops and webinars.
Firms should use these opportunities to understand the developing arrangements and raise practical questions. For conveyancing practices, useful subjects include how supervision will accommodate different firm sizes, how information will be requested and how the transition will be managed.
Appoint someone to monitor official updates, circulate relevant announcements and record any actions arising. A communication received by one partner should reach the people who will need to implement it.
Why 2027 should be a preparation year
The FCA currently expects the phased transfer to begin in late 2028 and complete around 2030, subject to legislation. Its published timetable places an operating model review in 2027.
2027 is therefore a sensible year for structured preparation, rather than a confirmed handover date.
A planned review gives a firm time to identify weaknesses, assign responsibility and check that improvements work. It also allows compliance work to be budgeted alongside recruitment, technology and other practice priorities.
The FCA says firms should continue following their existing AML processes and dealing with their current supervisor. Preparation for the transfer should build on that work.
For a broader discussion, read Lexsure’s guide to FCA AML audits: what solicitors need to know and how to prepare. It considers risk assessments, management oversight and evidence of effective controls. Read its discussion of anticipated supervisory expectations alongside the FCA’s developing official guidance.
Start with the firm-wide risk assessment
A useful first step is to revisit the firm-wide risk assessment. Does it describe the practice as it operates today? Have the client profile, transaction types, referral arrangements or methods of delivering services changed?
The SRA’s firm-wide risk assessment guidance explains that the assessment must reflect the size and nature of the business and should inform its policies, controls and procedures.
For a conveyancing practice, the review could explore overseas funding, third-party contributions, corporate purchasers and transactions that depart from the firm’s usual work. The aim is to understand the risks the practice actually encounters and how its controls address them.
Our guide to AML firm-wide risk assessments for law firms considers this starting point in more detail.
Check what the conveyancing files demonstrate
Policies explain what should happen. File reviews help establish what happens in practice.
As part of your 2027 preparation, consider reviewing a sample of conveyancing matters and asking:
- Can another reviewer understand the client and matter risk assessment?
- Is the explanation of the purchase funding supported by appropriate evidence?
- Were inconsistencies investigated and the conclusions recorded?
- Were changes in the transaction or funding arrangements considered?
- Can the firm demonstrate how concerns were escalated and resolved?
These are suggested review questions, rather than a published FCA inspection checklist. Use the findings to identify practical improvements and then check a later sample to see whether those improvements have taken effect.
Give management a clear preparation plan
A proportionate plan need not be complicated. Set out who monitors the transfer, which documents and controls will be reviewed, when file testing will take place and how findings will be reported to management.
For each agreed improvement, record an owner and a completion date. Make time to check implementation, rather than closing an action simply because a policy has been rewritten.
Training should follow the findings. If fee earners are uncertain about a recurring funding arrangement or escalation point, use realistic conveyancing examples to address that uncertainty.
If your firm needs help identifying its review priorities, explore Lexsure’s AML checklist service for law firms. It offers a consultation-led approach tailored to the practice, rather than a downloadable checklist, to help identify gaps and agree practical next steps.
Legal professional privilege remains protected
The LinkedIn account also reports a question about legal professional privilege. The FCA’s published position is clear: existing protections will remain, and its information-gathering powers will not enable it to obtain legally privileged material.
Firms should keep privilege considerations within their arrangements for responding to regulatory requests. The proposed transfer should not be presented as removing those protections.
Consider an independent review of your AML controls
An independent AML audit can help management assess whether the firm’s documented approach is reflected in its working practices. Where a review identifies gaps, allow time to address them and test the changes.
The scope should suit the firm’s size, work and risk profile. An audit supports the firm’s own compliance work; responsibility for effective controls remains with the practice.
Lexsure’s Independent AML Audit service reviews risk assessments, policies, internal controls and staff training. Consider how an independent review could fit into your firm’s 2027 preparation plan.
Build an AML review into your 2027 plans
Give your firm time to identify weaknesses and act on the findings. Discuss an independent AML audit suited to your practice’s size, work and risk profile.
The FCA’s engagement has started. Make 2027 a year of preparation: follow the communications, review your controls and give the firm time to act on what it finds.