SRA AML Report: What Law Firms Got Wrong and What Accountants Can Learn

Law firms and accountancy practices share a regulator problem: both are in the AML regulated sector, both are heading towards supervision by the Financial Conduct Authority and both are being inspected harder than they used to be. The Solicitors Regulation Authority's 2024-25 anti-money laundering report, which covers the year to 5 April 2025, is the most detailed recent public picture of what a supervisor finds when it opens firms' files. This guide summarises what has been reported about it, what the SRA says it expects and what accountants can learn from a profession that is a few steps ahead of them on inspections. The figures below come from trade press summaries rather than the report itself, so check the SRA's own publication before quoting a number.

How much supervision there was

According to Legal Futures, the SRA carried out 935 proactive engagements in the year, including onsite inspections, desk-based reviews and thematic assessments. A VinciWorks summary puts that at 72% more than the previous year and says around 5,700 firms fall under the Money Laundering Regulations. Legal Futures reports that almost a third of the firms examined were non-compliant and a further 54% were partially compliant. That leaves only a minority of firms with fully compliant AML policies, controls and procedures.

Where firms were falling short

The same summaries point to a consistent set of weak spots:

• Firm-wide risk assessments. Legal Futures reports that overall quality had improved, but many still lacked the depth the SRA expects, which is that they should be specific to the firm's work types, client base and geographic profile. Our guide to the firm-wide AML risk assessment for law firms covers the structure.
• Client and matter risk assessments. Legal Futures reports that 16% of reviewed files had no assessment or incomplete documentation, and that 39% did not effectively evaluate money laundering risk.
• Source of funds and source of wealth. The SRA found repeated quality issues. Documents were often collected but not analysed, and in some cases explanations did not match the origin of funds received into the client account. Our guide to source of funds and source of wealth checks explains the difference between collecting a document and testing a story.
• Policies, controls and procedures. Policies that existed on paper but did not match daily practice, a theme the SRA says its next thematic review will test under regulation 19(3)(e), which covers monitoring and managing compliance.
• Sanctions. VinciWorks reports that 92% of firms screened new clients but only 79% re-checked existing clients, and that six firms were referred for sanctions-related breaches.

The SRA also reported 19 suspicious activity reports arising from its inspections, many involving conveyancing, according to Legal Futures. Trade commentary consistently identifies conveyancing as the highest-risk practice area.

Enforcement

VinciWorks reports 137 internal enforcement outcomes, up from 74, and a sharp increase in settlement agreements with fines. A May 2026 commentary in Legal Futures says most of the fines in early 2025 involved inadequate firm-wide risk assessments and failures in policies, controls and procedures, and lists weak oversight by the money laundering reporting officer or compliance officer as a recurring problem. The SRA has said it will take a proportionate approach, with education first, but will not tolerate repeat or serious breaches. Treat the specific fine totals in trade summaries with caution until you have checked them against the SRA's own enforcement publications.

What the SRA says it expects

• A documented rationale for client and matter risk ratings and due diligence steps, not just a ticked box.
• Policies that are tested against daily practice.
• Regular AML training, visible senior management involvement and independent audits that include file reviews. Our guide to AML training requirements for solicitors and law firms sets out what that looks like.
• Documented reasons for decisions not to submit a suspicious activity report.
• A sanctions risk assessment, screening procedures and a documented approach to positive matches.
• Judgment retained alongside digital verification tools, with the tools tested for reliability.

Trade commentary also suggests the SRA is preparing for more data-led supervision, and it has said that AML scrutiny applies to all firms alongside the planned move to FCA supervision.

What accountants can learn

The legal sector's results are a useful preview. Accountancy supervisors, whether HMRC or the professional bodies, look at the same building blocks: the firm-wide risk assessment, the client risk assessment, source of funds evidence, the policies themselves and training. If the SRA found that documents were collected but not analysed, expect other supervisors to ask the same question of your files. A practical self-review for an accountancy practice would sample some recent files and ask four questions:

1. Does the client risk assessment explain why the rating was chosen?
2. Is there evidence that the source of funds was analysed rather than merely collected?
3. Do the written policies match what staff actually do?
4. Are existing clients re-screened for sanctions and politically exposed person status, not just new ones?

Frequently asked questions

Are accountants regulated by the SRA?

No. Accountancy firms are supervised by HMRC or a professional body. The SRA regulates solicitors and law firms, though the AML issues are similar.

Is conveyancing high risk?

Trade commentary on the SRA's reporting consistently identifies it as the highest-risk practice area for law firms.

Are these numbers official?

They are reported by Legal Futures and VinciWorks. Check the SRA's published report before quoting them.

Where can I get AML training?

See Learnsignal's CPD courses for finance professionals.