About Conveyancing

Author: Simon Seaton

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Simon Seaton is a former UK solicitor and a director of Lexsure. He has assisted hundreds of law firms, from small practices to firms ranked in the top 500, with compliance needs spanning SRA requirements, mortgage lender instructions, CQS and anti-money laundering. His AML experience includes developing policies, procedures and systems, and conducting independent audits of firms’ policies, controls and procedures. He has also delivered hundreds of webinars and seminars for lawyers and mortgage lenders on compliance, conveyancing risk and AML. Over the years, Simon has liaised on AML and risk management matters with organisations including UK Finance, the Bank of England, the Metropolitan Police, the National Crime Agency and the Financial Conduct Authority, as well as major mortgage lenders and professional indemnity insurers.

  • Your Conveyancing AML Policy Quotes the Law. Does It Explain the Job

    “The firm undertakes ongoing monitoring.” Could a new conveyancer read that sentence and understand what they must do? It does not explain when to review a matter, where to record a change or who to approach when the client introduces a different funding arrangement.

    The SRA’s AML policies, controls and procedures guidance, published on 22 October 2026, emphasises the importance of tailoring documentation to the firm. Its practical examples illustrate the difference between describing a legal obligation and explaining how staff should fulfil it.

    For conveyancing practices, this is an opportunity to test whether the AML manual helps fee earners make and record decisions during a transaction.

    The wider concern is consistent with Lexsure’s findings during independent AML audits: written procedures and what happens on individual files do not always align.

    Tailoring means more than adding your firm’s name

    A template can provide a useful starting structure. Effective tailoring requires the firm to consider its services, clients, systems, responsibilities and approval arrangements.

    Replacing the name on the cover does not explain how an instruction operates in your practice.

    The SRA’s guidance on AML policies, controls and procedures includes examples of tailored wording. The practical question for your own review is whether the document accurately describes the steps staff can and should follow.

    Our article on six AML policy gaps conveyancing firms should check considers missing coverage. This article addresses the quality of the instructions within that coverage.

    Give staff five practical answers

    For each important procedure, check whether the wording answers:

    1. Who acts? Identify the responsible role.
    2. When? Explain the trigger or stage at which action is required.
    3. What must they do? Describe the action and any relevant judgement.
    4. Where is the evidence recorded? Identify the system, form or approved location.
    5. What happens if the issue remains unresolved? Explain the escalation and decision-making route.

    The examples below illustrate that approach. They are drafting examples, not complete policy clauses, and should not be copied without checking them against your firm’s arrangements and applicable requirements.

    Example one: a change in the buyer’s funding

    Generic wording: “Fee earners must undertake ongoing monitoring and keep risk assessments up to date.”

    This states an objective but leaves the practical response unclear.

    Consider a buyer who originally proposes to use savings but later says that a relative will provide part of the contribution. A useful procedure should explain how that change reaches the fee earner, how the revised arrangement is assessed and what must be recorded.

    More operational wording might explain:

    Where you become aware of a change in the source, provider or route of funds, review the funding explanation and the client and matter risk assessment. Obtain and assess further information appropriate to the circumstances. Record the change, evidence considered, conclusion and any approval required under the firm’s procedures before taking the affected transaction step.

    The firm would then identify the relevant recording location, approval roles and escalation procedure.

    The instruction should support a risk-based assessment. It should not suggest that every change is suspicious or that the same documents are appropriate in every case.

    Example two: an electronic verification result

    Generic wording: “The firm uses electronic verification to complete AML checks.”

    Staff need to understand what the service checks, what the result means and what remains for them to assess.

    A useful procedure identifies:

    • Who reviews the result and any alerts.
    • What staff must do with an incomplete or inconsistent result.
    • Which additional enquiries or approvals may be needed.
    • Where the result and decision are retained.
    • How concerns are escalated.

    An electronic result should not become an unexplained substitute for the firm’s assessment of the client, transaction and relevant evidence.

    Check that the procedure reflects the service the firm actually purchases and the way staff use it.

    A risk rating should lead to a defined response. Our guide to what happens after a CMRA identifies higher risk explains how enquiries, mitigation, approval and monitoring should connect with the assessment.

    Example three: compliance approval

    Generic wording: “Higher-risk matters require compliance approval.”

    Who provides that approval? What information must they consider? Where is the decision recorded? What happens if they are unavailable?

    A procedure should distinguish the actions required of the fee earner from the decision made by the authorised reviewer. It should also explain any conditions attached to approval and how those conditions are monitored.

    An approval to accept instructions should not be treated as automatic approval of every later change in the matter.

    Where one person holds several compliance roles, describe the decision by reference to the relevant responsibility. Avoid assuming that the COLP, COFA, MLCO and MLRO are interchangeable.

    Example four: scrutinising source-of-funds evidence

    Generic wording: “Obtain evidence of source of funds.”

    That instruction may lead to document collection without sufficient consideration of whether the documents support the explanation.

    A clearer procedure explains that the fee earner must consider the evidence against the recorded funding arrangement, investigate material inconsistencies and record the reasoning behind the conclusion.

    The appropriate enquiries depend on the risks and circumstances. A fixed number of bank statements does not automatically establish that the investigation is sufficient.

    Our guide to testing source of funds during internal AML file reviews explains how supervisors can assess the quality of that work.

    Make the written procedure match the available workflow

    A policy may require a particular form or approval, but the case-management system may contain an older version or allow the matter to progress without the required step.

    Before approving revised wording, ask a fee earner to demonstrate the procedure on the system.

    • Can they find the current form?
    • Is the responsible reviewer identifiable and available?
    • Can the required evidence and reasoning be recorded?
    • Are conditions or outstanding actions visible to another person handling the matter?
    • Does the accounts team receive the information relevant to its responsibilities?

    If the workflow and wording differ, resolve the inconsistency. Do not describe a safeguard as operational if it has not been implemented.

    For a software-focused example, our guide to COMPLETIONmonitor and evidenced AML decisions considers the relationship between checklist answers, underlying evidence, alerts and supervision.

    Use policy templates and updates as drafting support

    Firms reviewing their documentation can browse the AML policies and procedures available from POLICYmonitor.

    The value of a template lies in using its structure and wording to develop instructions that fit the practice. The firm still needs to identify its roles, systems, risk appetite and escalation arrangements.

    For continuing drafting support, Lexsure’s AML Policy Update Service provides suggested amendments for consideration. Assess each relevant change, tailor it and decide whether forms, workflows or training also require amendment.

    Our October 2026 AML policy update article considers areas firms should review.

    Test understanding after making the change

    Circulating a revised document records one step in implementation. It does not establish that the instruction is understood.

    A short discussion using a realistic scenario can reveal ambiguity. Ask staff what they would do if an expected personal contribution arrives from a company, or if a client’s explanation conflicts with the evidence supplied.

    Then review subsequent matters to establish whether the revised procedure is being applied. Record any remaining weaknesses and the action required.

    This is also where independent scrutiny can help. An audit can compare the documented process with client files and staff understanding, identifying whether the problem lies in the wording, implementation or both.

    Regulation 21 requires an independent audit function where appropriate to the size and nature of the business. The requirement does not mean that every firm must purchase an annual external audit.

    Do your AML procedures work for the people using them?

    Lexsure’s independent AML audits examine policies, risk assessments, client files and staff understanding to identify gaps between written instructions and everyday practice.

    Discuss a review appropriate to your firm’s size, work and risk exposure.

    Discuss your firm’s independent AML audit →

    An audit supports oversight. Responsibility for AML compliance remains with your firm.

  • Does Your AML File Review Actually Test Source of Funds?

    “Source-of-funds documents on file: yes.” What does that answer actually establish? It may confirm that bank statements were collected. It does not explain whether anyone investigated the money’s origin, considered unusual entries or reached a reasoned conclusion about the funds being used for the purchase.

    The SRA’s guidance on AML policies, controls and procedures, published on 22 October 2026, gives conveyancing firms a reason to examine the quality of their internal AML file reviews.

    The concern is consistent with Lexsure’s findings during the independent AML audits it has carried out over the last 12 months: documents may be retained without sufficient evidence of scrutiny, and a completed assessment may not reflect the transaction taking place.

    For firms reviewing their own files, the practical question is whether the review would identify those weaknesses.

    Use the SRA’s resources to review your review process

    The SRA’s AML policies, controls and procedures guidance includes links to an AML file review form and accompanying reviewer guidance.

    These resources provide an opportunity to compare your existing approach with the areas the SRA expects firms to consider. They should be used alongside the applicable requirements and your firm’s own risks, procedures and work.

    A useful review examines the quality of the investigation and decision-making. It should be capable of identifying a file that contains the expected documents but leaves material questions unanswered.

    Start with the funding explanation

    Before reviewing individual bank statements, establish how the transaction is supposed to be funded.

    For a purchase, the reviewer should be able to identify the mortgage contribution, the balance being provided and any relevant additional funding arrangements. The explanation may involve savings, a previous sale, inheritance, a gift or a loan.

    Then ask whether the evidence supports that explanation.

    Where money has moved between accounts, a transfer record may explain its route without explaining the activity that generated it. The review should consider whether the conveyancer obtained an appropriate understanding of the underlying source, taking account of the risks.

    The SRA’s AML questions and answers provides further guidance on source of funds and source of wealth. These are distinct concepts. The review should assess the enquiries appropriate to the particular matter, rather than impose the same evidence requirements on every client.

    Five questions your internal review should answer

    Review question What the reviewer should examine
    Does the explanation cover the funds being used? Whether the recorded funding arrangement accounts for the relevant contribution and identifies any third-party involvement.
    Does the evidence support the explanation? Whether the documents are consistent with the stated source and whether significant inconsistencies were investigated.
    Is there evidence of scrutiny? Whether the file records relevant enquiries, responses and reasoning, rather than simply containing uploaded documents.
    Were changes recognised? Whether revised funding, unexpected payments or new participants prompted an appropriate reassessment.
    Was the decision made at the right time? Whether the investigation, assessment and any required approval informed the decision to proceed.

    These are suggested review questions. The nature and extent of the enquiries remain risk-based and depend on the circumstances.

    An illustrative file: the statements are present, but the explanation is incomplete

    Consider a buyer who says that a £90,000 contribution comes from employment savings. The file contains bank statements showing that balance.

    However, £55,000 arrived shortly before the statements were supplied. The file does not explain the payment, identify its origin or record further enquiries.

    A checklist asking only whether statements are present could record a satisfactory result. A review of the investigation should identify that the evidence does not yet explain the stated source of the contribution.

    The recent credit is not, by itself, proof of suspicious activity. It is a discrepancy requiring assessment and an appropriate response.

    This is a hypothetical example, not a report of a particular client matter.

    Record a finding that someone can act on

    “Improve source of funds” gives the fee earner little direction and makes it difficult to establish whether the issue has been resolved.

    A more useful review finding identifies:

    • The funding explanation recorded on the matter.
    • The evidence examined by the reviewer.
    • The specific inconsistency or unanswered question.
    • The further action required and who is responsible.
    • Whether the issue affects the next transaction step.
    • How completion of the action will be checked.

    For the illustrative file above, the finding might state:

    The recorded explanation is employment savings, but the evidence includes a recent £55,000 credit whose origin is not explained. Obtain and assess an explanation and appropriate supporting evidence, update the matter risk assessment where necessary, and record the decision under the firm’s approval procedures.

    The response should address the actual issue. It should not consist solely of adding a retrospective “satisfied” note without the necessary investigation.

    Compare the explanation with the money actually received

    A source-of-funds review should consider relevant information beyond the onboarding questionnaire.

    The client ledger, payment records and correspondence may reveal that the payer or funding arrangement changed. For example, money described as personal savings might arrive from a company or another person.

    The reviewer should examine whether that change was recognised, understood and assessed. A matter risk assessment completed at the beginning of the instruction cannot explain a later arrangement unless it has been appropriately reconsidered.

    Our article on the AML evidence chain explains why the assessment, procedures and transaction evidence need to remain connected.

    Use live reviews where they can influence the transaction

    Reviews of completed files can identify recurring weaknesses and training needs. Appropriately timed reviews of live matters can also identify unresolved issues while the firm can still address them before taking further steps.

    The review programme should reflect the firm’s risks. Consider a range of fee earners, funding arrangements and matter stages, rather than repeatedly selecting straightforward files with readily available records.

    Where an issue is discovered after completion, preserve an accurate account of what existed at the time and what was established subsequently. Corrective work should not obscure the original chronology.

    Check whether the weakness is in the policy or its application

    Where the written instruction is unclear, our guide to turning generic AML wording into practical conveyancing procedures explains how to specify who acts, what must be recorded and when an issue needs escalation.

    If the same finding appears repeatedly, investigate why.

    The procedure may be unclear. Staff may misunderstand the evidence required. A workflow may allow a matter to progress without an appropriate review. Alternatively, the procedure may be adequate but inconsistently followed.

    Our guide to six AML policy gaps conveyancing firms should check considers omissions in written instructions.

    Where documentation needs improvement, firms can browse the AML policies and procedures available from POLICYmonitor. For continuing drafting support, Lexsure’s AML Policy Update Service provides suggested amendments for firms to assess and tailor.

    Changing the wording should be followed by any necessary staff briefing, workflow adjustment and subsequent testing.

    Internal monitoring and independent audit serve different purposes

    Internal file reviews help the firm monitor its day-to-day compliance. An independent AML audit can examine whether that monitoring is adequate and whether its findings produce effective action.

    Regulation 21 requires an independent audit function where appropriate to the size and nature of the business. Independence does not necessarily require an external provider, but a person reviewing their own AML work does not provide independent scrutiny.

    Our article on what independent AML audit file testing should reveal explains the wider audit perspective.

    A useful immediate step is to take a recently reviewed matter and compare the review result with the underlying evidence. Would the review have identified an unexplained contribution, an unsupported conclusion or a change in payer?

    Would your file reviews identify an AML weakness?

    Lexsure’s independent AML audits examine client files, risk assessments, policies and staff understanding to assess how controls operate in practice.

    Discuss a review of your firm’s AML arrangements, including how you monitor source-of-funds checks and address findings.

    Discuss your firm’s independent AML audit →

    An independent audit supports oversight. Responsibility for AML compliance remains with your firm.