AML compliance for a one‑to‑five‑person advisory firm
Praxtrust provides a fixed-price AML program build and annual independent test to advisory firms with one to five employees. A five-person RIA carries the same four-pillar AML mandate as a thousand-person firm, on a compliance budget built for neither. A commenter asked FinCEN to exempt advisers with fewer than 20 or 100 employees from the AML rule, and FinCEN said no.
- advisers this small, no broker-dealer
- 4,595
- FinCEN’s estimate, to build it
- 120 hours
- FinCEN’s estimate, annual test
- $17,000
No size exemption, on the record
FinCEN’s final rule states plainly: “FinCEN therefore declines to apply the proposed exemption for RIAs with fewer than either 20 or 100 employees.” The obligation attaches to the firm’s registration status, not its headcount. Our own review of SEC Form ADV data counts 4,595 SEC-registered advisers with five employees or fewer and no broker-dealer affiliation; every one of them is covered.
What FinCEN itself estimates the work costs
FinCEN’s own cost estimate for the rule: about 120 hours to build the written policies, procedures and controls, plus an average of $17,000 a year for the independent test, a new recurring cost the rule creates for every RIA and ERA. For a firm with no dedicated compliance headcount, that is 120 hours pulled from whoever already wears the compliance hat.
A fixed-price build sized for a small team
The pack is the written program, the compliance officer designation, and staff training, delivered at a fixed price, not a monthly retainer stacked on an already-thin team. The annual independent test follows once the program is live, satisfying the rule’s one real requirement for the tester: independence from the function being tested, no certification needed.