AML returns relying on estimates

Adviser reporting entities are on track to have their AML returns completed by the end-of-the-month deadline but a lot are relying heavily on estimates.

Friday, August 22nd 2014, 6:00AM

by Susan Edmunds

Under the AML legislation, reporting entities must file their first annual return by the end of August.

They are allowed to use “best estimates” to answer questions for which they have not kept information – such as 6.1, which asks for details of transactions advisers have been involved in. That has been contentious – industry body SiFA has argued that it should be only transactions that the adviser has settled and received money for, not any in which they have had a hand.

For many, it is the first time they are being held to account for their AML processes. Since the middle of last year, reporting entities have had to have a risk assessment and management process in place.

FMA spokesman Andrew Park said the number of returns being submitted was increasing every day. On Monday, he said about 50 had been completed in the past 24 hours.

The FMA estimates that there are between 500 and 600 adviser reporting entities, although it will not have a clear picture of exactly how many there are until all the returns are filed. The FMA reportedly has just under 800 reporting entities in total.

At the end of last week, 130 returns had been completed.

Institute of Financial Advisers chief executive Fred Dodds said he had been doing webinars with advisers and speaking to them on the phone. “Estimates are the name of the game. They’re thinking of sums and putting them in.”

Next year, advisers will have to have more accurate information because they will not be able to claim in good faith that they did not realise the information was required.
Park said the FMA expected to have all AML returns completed on time and said the speed with which they were coming in was accelerating.

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