What the AML Tranche 2 Reforms Mean for You
What the AML Tranche 2 Reforms Mean for You
(and how we’re approaching it at MAD Wealth)
From 1 July 2026, Australia is introducing a major shift in how certain accounting and advisory services are regulated.
If you work with us, you may notice some changes in how we onboard and work together. Let’s discuss what’s changing and what it means for you.
✅ So what are we covering
- What’s changing?
- New AML regulations apply to certain accounting services from 1 July 2026
- Will it affect you?
- Only if your engagement includes certain services (e.g. structuring, entity setup)
- What will change?
- Additional identity checks and information requests
- What do you need to do?
- Nothing right now — we’ll guide you if it applies
📌 What you may be asked for
You may be asked to provide:
- Valid ID (passport or licence)\
- Details of company/trust ownership
- Information about business activities\
- Confirmation of source of funds (for certain engagements)
What are the AML Tranche 2 reforms?
In simple terms, Australia’s AML Tranche 2 reforms bring accountants and advisers into the anti‑money laundering and counter‑terrorism financing (AML/CTF) framework for the first time.
Previously, these AML/CTF laws applied mainly to banks and financial institutions. From 1 July 2026, the rules now apply to accountants and other “gatekeeper professions” because of the role we play in:
- Structuring companies or trusts
- Supporting financial transactions
- Advising on financial arrangements
🎯 The goal is simple: increase transparency, reduce financial crime, and strengthen trust in the system.
When do the AML rules start?
- 31 March 2026 — AUSTRAC registration opened (we’re already registered)
- 1 July 2026 — Compliance obligations begin
- 29 July 2026 — Deadline to enrol as a reporting entity
From 1 July, firms like ours must comply with the AML/CTF Act when providing certain services.
Which services are affected?
The rules apply based on what we do — not our title. That means:
Likely captured (“designated services”)
Tap each one to see what it could mean.
→ Setting up companies or trusts ▸
May be a designated service — the engagement could include extra checks.
→ Restructuring entities ▸
May be a designated service — the engagement could include extra checks.
→ Managing or influencing client funds ▸
May be a designated service — the engagement could include extra checks.
→ Assisting complex financial transactions ▸
May be a designated service — the engagement could include extra checks.
Not captured
- ✅ Basic tax returns preparation
- ✅ Standard compliance work
📢 For MAD Wealth clients, this means only some engagements will require additional compliance steps — not all.
What are MAD Wealth’s obligations?
When we provide a designated service, we’re required to:
- Register with AUSTRAC — we must formally enrol as a “reporting entity” and keep our details up to date.
- Implement an AML/CTF Program — this includes:
• Identifying financial crime risks
• Putting controls in place to manage those risks
• Maintaining governance and oversight - Verify our clients (KYC / Customer Due Diligence) — we must:
• Confirm your identity (already in place under TPB KYC rules)
• Understand who ultimately owns or controls an entity
• Understand the purpose of the engagement - Monitor and report activity — we are legally required to:
• Monitor transactions and behaviour
• Report suspicious matters to AUSTRAC if required - Keep records — we must maintain records of compliance and client verification processes (generally for 7 years).
What this means for you
More structured onboarding
You may notice:
- Additional ID checks
- Requests for documentation
- Questions about your business
More clarity around your business
We may ask about:
- Ownership and control
- Purpose of structures or transactions
- How your business operates
Ongoing updates (in some cases)
For certain services, we may need to:
- Keep your information current
- Reassess risk over time
Clear limits
In some situations, we may need to stop or decline work — for example:
- If identity can’t be verified
- If something doesn’t align legally
- If risk is too high
What’s not changing
This part matters most.
- Our role as your adviser
- The quality of advice
- Our focus on building profitable, sustainable, impactful businesses
Good business is transparent, intentional, and built on strong foundations.
How we’re approaching this at MAD Wealth
This is where we’re deliberately not following the industry default. We see it as:
- A better filter — working with businesses that align with strong values
- A stronger onboarding experience — more clarity around:
- Purpose
- Structure
- Decision-making
- A long-term trust signal — clients who meet these standards:
- Make clearer decisions
- Avoid future issues
- Build more resilient businesses
The reality:
There will be some friction upfront:
- This will increase admin in the short term
- There will be friction, especially for existing clients
- Some firms will struggle to implement it properly
But ignoring it isn’t an option.
Penalties for non-compliance are significant, and regulators expect firms to demonstrate real, operational compliance — not just policies on paper.
What you need to do:
For most clients, nothing changes immediately. If your engagement is affected, we’ll:
- Let you know if your engagement is impacted
- Guide you through any additional requirements
- Keep the process as efficient as possible
Final thoughts
This reform is about one thing: “Who is allowed to participate in the financial system — and on what terms.”
At MAD Wealth, we’re aligned with that intent. We believe:
- Business should be a force for good
- Transparency builds trust
- Strong foundations create better outcomes
AML Tranche 2 formalises that and we’re ready for it!
❓ Frequently Asked Questions (FAQs)
Will all clients be affected by AML Tranche 2?
No. The rules only apply to certain services. Many clients will see no change.
Why is Australia introducing AML Tranche 2 reforms?
Australia is aligning with global standards to reduce financial crime and improve transparency across professional services.
What is a designated service under AML/CTF?
Designated services are specific activities like:
- Entity structuring
- Financial transaction support
- Managing or influencing funds
Will I need to provide more documents?
Possibly — depending on your engagement. This may include ID, ownership details, and information about your business.
What happens if I don’t provide the required information?
In some cases, we may not be able to proceed due to legal obligations.
Will this slow down onboarding?
In some situations, yes — particularly at the start. Our focus is to minimise delays.
Is my information secure?
Yes. Your information is handled under strict privacy and security requirements.
Is this replacing your current onboarding process?
No — it builds on it. We already follow structured onboarding. These reforms formalise and extend that process.
Why is MAD Wealth taking this approach?
Because we believe:
- Transparency builds trust
- Strong foundations create better businesses
- Business should be a force for good
Not sure how this applies to you?
Get in touch and we’ll walk you through it.
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