AML Compliance Guide
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Sanctions screening for Financial adviserss — 2026 AUSTRAC Guide

If your financial advice business provides a designated service from 1 July 2026, you must screen clients and other relevant parties for targeted financial sanctions before you start the service and during the relationship. For financial advisers, this matters whenever you are involved in client money, investment structures, superannuation-related arrangements, trusts, companies or cross-border elements that fall within a designated service. If you provide services to a sanctioned person or deal with frozen assets, you can trigger a strict-liability criminal offence, and broader AML/CTF breaches can also attract civil penalties of up to $33.5 million per contravention.

Your AML/CTF obligations

  1. 1. AUSTRAC enrolment
  2. 2. Compliance officer
  3. 3. ML/TF risk assessment
  4. 4. AML/CTF program
  5. 5. Customer due diligence
  6. 6. Sanctions screening
  7. 7. Suspicious matter reporting
  8. 8. Record keeping (7 years)
  9. 9. Staff training

Sanctions screening is not a one-off name check. Your AML/CTF policies must set out how your practice will make sure you do not make assets available to a person designated for targeted financial sanctions, and do not use, deal with, or facilitate dealing with assets they own or control. Before you provide a designated service, you must establish on reasonable grounds whether the customer is designated for TFS, and also check any beneficial owner of the customer, any person on whose behalf the customer is receiving the service, and any person acting on behalf of the customer. During the relationship, you must keep checking whether any of those people become designated and monitor for potential breaches of sanctions laws.

What a financial advice practice should do in practice

  • Identify which parts of your advice business are designated services. Do not assume every advice engagement is captured.
  • Before onboarding, collect the names and identifying details of the client, beneficial owners, controllers, trustees, appointors, representatives and anyone giving instructions on the client’s behalf.
  • Search DFAT’s Consolidated List before starting the designated service. Use alternative spellings and fuzzy searching, especially for non-English names.
  • For companies and trusts, screen the entity and the natural persons behind it, including beneficial owners with 25% or more ownership or effective control.
  • Record the date searched, the list used, the search terms, the result and who reviewed it.
  • Set ongoing screening triggers: name changes, new controllers, new beneficiaries, overseas transfers, unusual investment instructions, or periodic review during the client relationship.
  • Escalate any possible match immediately and do not proceed until it is resolved by your AML/CTF compliance officer or senior decision-maker under your program.

If you get a sanctions hit

Do not process the investment, rollover, withdrawal, transfer or other transaction. If a person is designated for TFS, assets they own or control must be frozen and you must not make assets available to them without a sanctions permit. Contact the Australian Sanctions Office, and if you are or may be holding a frozen asset, report it to the Australian Federal Police as soon as practicable.

The main mistakes for financial advisers are practical ones. A common error is screening only the named client and ignoring the family trust, company director, corporate trustee, beneficial owners or adult child acting under a power of attorney. Another is treating sanctions screening as covered by a platform, product issuer or custodian. Their controls may help, but your obligation applies to your reporting entity when you provide the designated service. Firms also miss changes after onboarding, such as a new overseas beneficial owner, a self-managed super fund trustee change, or a client instruction to move money to a high-risk jurisdiction or intermediary country.

Practical tips for small advice practices

  • Build sanctions screening into your fact find and entity onboarding forms so you capture controllers, beneficial owners and representatives up front.
  • Use a checklist for trust, SMSF and company clients so no relevant individual is missed.
  • Subscribe to DFAT list updates and assign one staff member to review potential matches.
  • Apply enhanced checks where clients have international links, complex ownership, foreign beneficial owners or business activities connected to higher proliferation financing risk.
  • Train advisers, paraplanners and client service staff to stop the file and escalate if a client asks for secrecy, unusual offshore movement of funds, or urgent changes to ownership before a transaction.

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Frequently asked questions

Do I need to screen every advice client, or only clients receiving a designated service?
Only a business providing a designated service becomes a reporting entity for that service. For financial advisers, not every engagement will be captured, so you need to map which services in your practice are designated. Once a designated service is involved, sanctions screening must be done before starting it and during the relationship.
If my client is a family trust or SMSF, who do I screen?
Screen more than the trust or fund name. You should screen the trustees, any individual trustees, directors of a corporate trustee, beneficial owners, anyone exercising effective control, and any person acting on behalf of the client, such as an attorney or authorised representative. This is where advice practices often miss people who actually control the assets.
Can I rely on my platform, wrap provider or custodian to do sanctions checks?
Not as a complete substitute for your own obligation. Another provider’s checks may form part of your control environment, but your AML/CTF policies must explain how your practice makes sure it does not provide a designated service to a sanctioned person or deal with frozen assets. You still need evidence that screening occurred and a process for escalation and ongoing review.
What if I get a possible match but I am not sure it is the same person?
Treat it as an escalation issue, not a routine onboarding task. Pause the service, gather more identifying information, check alternative spellings and other identifiers, and follow your internal escalation process. Do not continue with the transaction or release assets until the potential match is resolved.
Does sanctions screening cost money, and can I just use the DFAT list myself?
You can use DFAT’s Consolidated List directly, and sanctions obligations do not require you to buy commercial screening software. For a small advice practice with a lower volume of clients, a documented manual process may be workable if staff search properly, check alternative spellings and keep records. If you deal with many entities, foreign clients or complex structures, software may be more practical but it is not mandatory.

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