FCA Asset Management & Alternative Firms Financial Crime Review 2026: Good and Poor Practice Findings

The FCA has published its findings from a review of financial crime controls across the asset management and alternatives sector, engaging with 242 firms to assess how well they understand and manage their inherent financial crime risk.

The review found that inherent risk is higher for firms active in private markets - including private equity and hedge fund business models - with elevated exposure to complex ownership structures, politically exposed persons (PEPs) and cross-border customer relationships.

The FCA's findings on control weaknesses cut across the entire sector, regardless of business model or size: just over a fifth of firms had no / an incomplete business wide risk assessment (BWRA), 40% outsource customer due diligence with limited oversight and 29% had no formal transaction monitoring process. Even among firms managing over £10bn in assets, more than a quarter reported a part-time or shared Money Laundering Reporting Officer (MLRO). Our experience from working with firms of all sizes in this sector generally matches the FCA's observations.

We've distilled the FCA's findings into a Regulatory Gap Analysis covering eight key themes - from business profile and risk assessments through to governance, screening and training - with regulatory references and self-assessment questions for firms to challenge their own control frameworks.

Download the free Regulatory Gap Analysis Template below.

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