Sector

Asset Management Firms

Asset managers onboard institutional investors, run delegated arrangements with administrators and depositaries, and operate fund governance frameworks where financial crime risk often sits one step removed from the firm itself.

Asset managers run a significant share of their financial crime risk through other people. Investor onboarding sits with the administrator or transfer agent, custody and oversight sit with the depositary, distribution sits with platforms and intermediaries. The investor is one step away from the firm, the controls are another step away, and the evidence that any of it is being overseen sits in MI packs and sampling files that the firm itself did not produce. Delegation is contractual. Accountability is not. That gap is where most asset-management engagements begin.

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Perspective from Everett Morgan

Founder, Claritas Risk Advisory

Asset managers frequently delegate AML activity to administrators and depositaries, but delegation never moves accountability. Supervisors expect firms to evidence oversight of investor onboarding, the delegated operation and fund-level governance, in that order. Most of the asset-management work I do sits in the gap between what the delegation agreement says and what the MI in the Board pack actually shows.
If this sounds familiar, let's have a conversation. We'll tell you honestly whether Claritas is the right fit for your organisation, and, where the evidence supports it, we will say so plainly if existing arrangements are already appropriate or if only limited improvements are required.

Common challenges

What firms in this sector are working through.

Asset management firms typically engage Claritas around:

01
Investor onboarding delegated to a transfer agent or administrator
02
Subscription documentation and look-through to underlying beneficial owners
03
Institutional investors with complex feeder, master and parallel structures
04
Delegated AML responsibilities where oversight has not kept pace
05
Fund governance arrangements requiring evidenced financial crime oversight
06
Distribution arrangements through platforms and intermediaries
07
ESG and investor-suitability data overlapping with AML risk indicators
08
Inspection readiness across the firm, the funds and the delegates

How Claritas helps

Judgement formed in practice.

Engagements typically begin by reading the delegation agreements with the administrator and transfer agent, sampling investor subscription files, and tracing the look-through to underlying beneficial owners on the more complex feeder and master structures.

We test how oversight of the delegate actually works in practice: the MI the firm receives, the sampling it does, the escalations it has raised and what happened next. We sit with the ManCo and, where appropriate, the fund boards, on the financial crime governance reporting. The work typically includes: