We have written to businesses in the wealth management sector with concerns about alarmingly low suspicious matter reporting (SMR) and the risk that serious financial crime may be going undetected.
The letter follows a supervisory campaign in which we found that 98 per cent of wealth management businesses did not submit a single SMR in 2025, despite operating in a sector exposed to a wide range of money laundering risks.
AUSTRAC CEO Brendan Thomas said just three businesses were responsible for nearly two‑thirds of all SMRs submitted across the entire industry.
“These numbers indicate that many businesses do not have adequate systems or processes in place to meet their reporting obligations or to properly identify high‑risk customers,” Mr Thomas said.
“Businesses don’t need proof of an offence to submit an SMR, nor does identifying a high‑risk customer mean you must stop providing services.
“SMRs often provide critical pieces of intelligence that support investigations into criminal activity.”
Our latest annual compliance report from 2024 revealed 92 per cent of wealth management businesses claim to have zero high‑risk customers.
Based on our supervisory work, we think many businesses in the sector are encountering a range of higher‑risk scenarios.
In particular, the supervisory campaign highlighted that wealth management businesses remain vulnerable to financial crime, particularly through digital channels and stolen identities that enable cyber fraud.
The wealth management sector includes businesses that provide financial services designed to manage, invest, or advise on clients’ assets and financial affairs.
In the context of our supervisory work, this includes trustees of managed investment schemes and financial service intermediaries, such as financial advisors and financial planners.
“We know criminals continue to target wealth management services to launder money and conceal assets to evade tax,” Mr Thomas said.
“These crimes can cause significant harm to victims and reputational damage to businesses.
“This underscores the importance of robust risk assessments and prompt reporting when red flags appear.”
“We are urging all wealth management businesses to review our letter and assess whether the information provided is relevant to their business and, where appropriate, to incorporate it into their money laundering and terrorism financing risk assessment.
“Where risks are identified, businesses must put in place clear, practical systems and controls to manage and mitigate those risks.
“We took a similar approach in the non-bank lending sector, and we’ve seen a positive uptick in SMR reports.
“We want to see the same behavioural change across wealth management and reports that reflect the reality of the criminal landscape.”
Wealth management businesses can learn more about SMRs and their obligations on our website.