The financial advisory industry is undergoing a profound transformation as Registered Investment Advisors (RIAs) and Exempt Reporting Advisers (ERAs) are now under the regulatory spotlight following the final rule issued by the Financial Crimes Enforcement Network (FinCEN). Effective January 1, 2026, this rule mandates the implementation of comprehensive Anti-Money Laundering/Counter Financing Terrorism (AML/CFT) programs, requiring RIAs and ERAs to comply with customer due diligence requirements, strict recordkeeping and filing of Suspicious Activity Reports (SARs).
The rule’s intent is clear: to close gaps that have made the advisory sector vulnerable to exploitation by individuals engaging in corruption, fraud, tax evasion, and money laundering.
Key vulnerabilities highlighted by FinCEN:
- Limited Oversight: RIAs and ERAs were not required to implement Customer Identification Programs (CIP), assess the ultimate sources of wealth of clients, or file SARs.
- Fragmented compliance practices in the ecosystem: Smaller firms and those focused on private funds often lack formal policies, relying on ad hoc measures.
- Exposure to High-risk clients: Without rigorous customer due diligence, RIAs risk unwittingly facilitating financial crimes. Also, the rapid growth of private funds has attracted scrutiny, with several cases linking RIAs to sanctioned entities, such as Russian oligarchs.
What the 2026 Requirements mean for RIAs and ERAs
Under the new rule, RIAs and ERAs must:
- Develop adequate AML/CFT Programs: Design and implement risk-based policies that include customer due diligence, ongoing monitoring, independent testing, and board approval.
- Conduct Customer Due Diligence (CDD): Verify clients’ identities and sources of funds and wealth, and assess risk profiles.
- File SARs and CTRs: Report suspicious activity and transactions and all currency transactions over $10,000 using Currency Transaction Reports (CTRs).
- Adhere to Recordkeeping and Travel Rules: Maintain detailed logs of transactions and pass on key information during fund transfers.
For a deeper dive into FinCEN’s regulation, its impact, and what you need to comply with it, read our previous blog post here.
Chaindots solutions for you
Chaindots offers you, as a Registered Investment Advisor (RIA) or Exempt Reporting Adviser (ERA), a comprehensive suite of tools to ensure you comply with the latest AML/CFT regulations. Our platform streamlines the development of risk-based policies and procedures, making it easier for you to implement customer due diligence (CDD), ongoing monitoring, and meet recordkeeping and reporting obligations. With Chaindots, you can automate critical processes like client verification, transaction monitoring, and suspicious activity reporting, so you can focus on your clients while staying fully compliant with the law.
Chaindots’ products tailored for your needs include:
✅ Program & Policy Shop: Quickly create and implement customizable AML/CFT policies to support your risk-based approach.
✅ Know Your Customer (KYC): Verify your clients’ identities, sources of funds, and risk profiles to meet CDD requirements.
✅ Know Your Business (KYB): Conduct thorough due diligence on corporate clients to ensure compliance with regulations.
✅ Enhanced Client Due Diligence: Perform in-depth risk assessments on higher-risk clients to safeguard your practice.
✅ Ongoing Screening: Continuously monitor clients and transactions for potential risks, ensuring early detection of suspicious activity.
✅ Transactional Monitoring: Automate the monitoring of transactions to identify irregularities, ensuring timely filing of Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs).
By integrating these solutions into your operations, Chaindots helps you stay compliant while minimizing manual efforts, ultimately allowing you to concentrate on managing your client relationships and growing your business.
Your compliance journey starts with Chaindots
Protect your firm with Chaindots’ cutting-edge compliance solutions. Our solutions will empower you to build a strong compliance framework and ensure your organization is ready to manage these new regulatory requirements.
Learn more about Chaindots, book your slot with our team here.