True £45k AML compliance cost for agents is revealed

An average estate agency branch could need at least one full-time compliance officer, costing around £45,000 a year, to meet anti-money laundering (AML) obligations, it has been warned.

It comes as HMRC introduced new AML guidance this summer, making clear that that businesses must take a risk-based approach to protecting themselves from money laundering, terrorist financing and proliferation financing.

Under the regulations, estate agents must maintain a written risk assessment specific to their business and put in place appropriate policies, controls and procedures (PCPs) to manage and mitigate any risks identified.

We’re seeing the end of AML as a side of desk activity.”

AML platform Coadjute analysed the practical activities required for an estate agency to meet its AML responsibilities on an ongoing basis.

These include maintaining and reviewing business-wide risk assessments and PCPs, conducting customer and transaction risk assessments and carrying out customer due diligence and source of funds checks.

Taken together, Coadjute’s analysis indicates these activities could require at least one full-time compliance professional for an average estate agency branch, at an estimated annual employment cost of approximately £45,000.

Alternatively, distributing the work among existing staff creates a potentially much larger hidden cost, the brand warns.

Professional AML approach

Coadjute estimates that diverting sufficient negotiator capacity to undertake the necessary AML workload could displace sales activity worth approximately £185,000 per year for an average agency branch.

Dan Salmons (pictured), Chief Executive of Coadjute, says: “We’re seeing the end of AML as a side of desk activity.

“With the July HMRC guidance and the new criminal risks, AML compliance has moved well beyond being a series of checks that can simply be absorbed into someone’s day job.

“Agencies really have to understand their risks, have the right policies and procedures in place, and demonstrate that those procedures are actually being followed. The big question for them is who is going to own and operate the compliance function day to day, and how is this increasingly specialist work going to get done?

“It’s really not something a bit of software can solve.  For other highly regulated activities like accounting, they call on professionals.  It’s time to start treating AML the same way”.