Can a Partner Be the AML Compliance Officer?

Choosing the right AML/CTF compliance officer is one of the first decisions many professional services firms will need to make as they prepare for Australia's Tranche 2 AML/CTF reforms. For partnerships, appointing a partner may seem like the natural choice, but it is not always the best fit.

A partner can act as the AML/CTF compliance officer if they have sufficient authority, knowledge, time and support to oversee the firm's AML/CTF obligations. However, the appointment should be based on suitability and practical oversight rather than seniority or job title alone.

This guide explains when a partner is the right choice, when another person may be better suited and what firms should consider before making the appointment.

Can a Partner Act as the AML Compliance Officer? A Quick Answer

Yes. A partner can perform the AML/CTF compliance officer role provided they have the authority, capability and capacity to oversee the firm's AML/CTF framework.

In many smaller firms, this responsibility naturally sits with a managing partner, equity partner or principal who is actively involved in the firm's operations. Larger firms may instead appoint a senior compliance, risk or operations leader who is better positioned to oversee the framework.

Ultimately, the key consideration is not whether someone is a partner, but whether they can effectively oversee the firm's AML/CTF obligations and ensure the compliance framework operates as intended.

Is a Partner the Right AML Compliance Officer?

Whether a partner is the right AML compliance officer depends less on their title and more on how involved they are in the firm's operations. The role requires someone who can oversee the AML/CTF framework, make informed risk decisions and ensure compliance processes are implemented consistently across the business.

For many firms, a partner naturally meets these requirements because they understand the firm's services, clients and risk profile. In other cases, another senior person may be better placed to oversee AML/CTF compliance. The right appointment is the one that best supports the firm's compliance framework in practice.

When a Partner Is a Good Fit

A partner is often well placed to perform the role because they usually have the authority to make decisions, allocate resources and influence how AML/CTF compliance is managed across the firm. This can be particularly valuable where AML/CTF obligations affect client onboarding, customer due diligence, ML/TF risk assessments, staff training, record keeping and reporting obligations.

A partner may be well suited to the role if they:

• Understand the firm's services
• Know the firm's client base and risk profile
• Have access to client and matter information
• Can approve AML/CTF policies and procedures
• Have authority to require staff to follow compliance processes
• Can escalate significant compliance issues
• Can allocate sufficient resources to AML/CTF compliance
• Are willing to undertake AML/CTF training
• Can report effectively to the governing body

For many smaller law firms and accounting practices, a partner already oversees business operations, client relationships and risk decisions. In these situations, appointing them as the AML compliance officer is often both practical and effective.

When Another Person May Be Better Suited

However, appointing a partner is not always the best solution.

The role requires ongoing oversight of the firm's AML/CTF framework, and that may not be realistic if the partner has limited involvement in operational processes, lacks sufficient time or cannot effectively supervise how AML/CTF procedures are implemented across the firm.

A partner may not be the best fit if they:

• Are removed from client onboarding and service delivery
• Have limited understanding of the firm's ML/TF risks
• Cannot effectively monitor AML/CTF procedures
• Are unlikely to complete AML/CTF training
• Have insufficient time to oversee compliance activities
• Are appointed simply because they are the most senior partner
• Cannot provide objective oversight of compliance issues

This situation commonly arises where partners focus primarily on governance, strategic planning or business development. While they remain responsible for leading the firm, another senior employee, such as a practice manager or compliance manager, may be better positioned to oversee the firm's AML/CTF framework.

Partner vs Practice Manager: Which Is Better?

The better choice depends on how the firm operates.

Partners often have greater authority to make strategic decisions, allocate resources and approve risk-based decisions. Practice managers, on the other hand, are typically more closely involved in client onboarding, internal workflows, staff coordination and administrative processes.

The most effective arrangement is one where responsibilities are clearly defined and the AML/CTF compliance officer has the authority, visibility and support needed to oversee the firm's AML/CTF framework effectively. A typical split of responsibilities looks like this:

• Partner / Principal: Governance, escalation, approval and oversight
• AML/CTF Compliance Officer: Oversight of the firm's AML/CTF framework
• Practice Manager: Operational coordination, documentation and workflow support
• External AML Adviser: AML/CTF program development, ML/TF risk assessments, technical advice and training
• Staff: Follow AML/CTF procedures and escalate concerns

In many small and mid-sized firms, responsibilities are shared across several people. This approach allows the AML compliance officer to retain overall accountability while drawing on operational and technical support where needed.

Can an External Adviser Support the Role?

Not every firm has the internal resources or AML/CTF expertise to manage compliance independently.

An external adviser can support the AML/CTF compliance officer by assisting with AML/CTF program development, ML/TF risk assessments, customer due diligence procedures, staff training, independent reviews and technical guidance. In some circumstances, an external person may also perform the role where they have the authority, capability and resources to do so.

However, engaging external support does not remove the firm's responsibility for meeting its AML/CTF obligations. The partners or governing body remain accountable for ensuring the AML/CTF framework is effectively implemented and maintained.

For many firms, the most practical arrangement is to appoint an internal partner or senior employee as the AML compliance officer while engaging external specialists to provide additional expertise where required.

Regardless of who is appointed, the role should be clearly defined and supported with the time, authority and resources needed to carry it out effectively.

What Should a Partner Consider Before Accepting the Role?

Before appointing a partner as the AML/CTF compliance officer, the firm should make sure they understand what the role involves and whether the necessary compliance framework is already in place. The appointment should be supported by clearly defined responsibilities, appropriate resources and ongoing organisational support.

A partner should consider:

• Which designated services the firm provides
• Whether the firm needs to enrol with AUSTRAC
• Whether an ML/TF risk assessment has been completed
• Whether an AML/CTF program has been developed
• Who will manage customer due diligence
• How customer risk will be assessed
• When enhanced due diligence may be required
• How higher-risk matters will be escalated
• What AML/CTF training staff require
• Which records must be maintained
• How often AML/CTF matters will be reported to the governing body
• What internal and external support is available

If these questions cannot be answered confidently, the firm may need to strengthen its AML/CTF framework before confirming the appointment.

Common Mistakes to Avoid

When choosing the right person, firms need to ensure that the AML compliance officer is properly supported and able to carry out the role effectively.

Appointing a Partner in Name Only

The AML compliance officer should actively oversee the firm's AML/CTF framework. Simply listing a partner in the AML/CTF program without giving them meaningful responsibility or authority is unlikely to support effective compliance.

Choosing Someone Without Enough Time

Partners often balance client work, business development and firm management. If the appointed person cannot dedicate sufficient time to AML/CTF oversight, important compliance activities may be delayed or overlooked.

Not Providing AML/CTF Training

Even experienced partners may be unfamiliar with AML/CTF obligations. Ongoing training helps them understand customer due diligence, ML/TF risk assessments, suspicious matter reporting and other key responsibilities.

Overlooking Operational Support

Although the AML compliance officer oversees the framework, many AML/CTF activities are carried out by staff responsible for onboarding clients, verifying identity documents and recognising potential red flags. Clear procedures and regular training help ensure these processes operate consistently across the firm.

Trying to Manage Everything Internally

Preparing for Tranche 2 can be complex, particularly for firms implementing AML/CTF compliance for the first time. External specialists can provide practical assistance with AML/CTF programs, ML/TF risk assessments, customer due diligence, staff training and ongoing compliance support.

How One AML Can Help

Appointing the right AML/CTF compliance officer is only one part of building an effective compliance framework. Firms also need practical policies, documented procedures and ongoing support to meet their AML/CTF obligations as the regulatory landscape evolves.

One AML helps Australian law firms, accounting firms and other professional services businesses appoint suitable AML/CTF compliance officers while providing practical support with AML/CTF program development, ML/TF risk assessments, customer due diligence procedures, AUSTRAC enrolment, staff training and ongoing compliance.

Whether you're preparing for Tranche 2 or reviewing your existing AML/CTF framework, we can help you build a practical compliance solution tailored to your firm's structure and risk profile.

FAQs

Can a partner be the AML compliance officer?

Yes. A partner can be appointed as the AML/CTF compliance officer if they have the authority, knowledge and capacity to oversee the firm's AML/CTF obligations effectively.

Should the managing partner be the AML compliance officer?

It depends on the firm. A managing partner may be well suited to the role if they have sufficient operational involvement and time to oversee AML/CTF compliance. However, the best choice is the person who can effectively supervise the firm's AML/CTF framework, rather than simply the most senior partner.

Can a junior staff member be the AML compliance officer?

Generally, no. The AML/CTF compliance officer should be a senior person with sufficient authority to oversee compliance activities and influence how AML/CTF obligations are managed across the firm.

Can a practice manager be the AML compliance officer?

Yes. A practice manager may be suitable if they are at management level and have the authority, capability and organisational support needed to oversee the firm's AML/CTF framework.

Can an external adviser support the AML compliance officer?

Yes. External AML/CTF specialists can assist with AML/CTF program development, ML/TF risk assessments, customer due diligence procedures, staff training, independent reviews and ongoing compliance support. The firm, however, remains responsible for meeting its AML/CTF obligations.

Does a partner need AML/CTF training?

Yes. Anyone appointed as the AML/CTF compliance officer should understand the firm's AML/CTF obligations, ML/TF risks, customer due diligence procedures, reporting obligations and record-keeping requirements.

Final Thoughts

A partner can be an effective AML/CTF compliance officer when they have the authority, knowledge and capacity to oversee the firm's AML/CTF framework. For many law firms, accounting practices and other professional services businesses, appointing a partner is a practical way to establish clear accountability for AML/CTF compliance.

However, the focus should be on choosing the person best placed to perform the role rather than simply the most senior person in the firm. With clearly defined responsibilities, documented procedures and the right organisational support, firms will be better positioned to build an effective AML/CTF framework and meet their ongoing regulatory obligations. For more on why timing matters, see our guide to appointing an AML/CTF compliance officer for Tranche 2.

Need help appointing or supporting an AML/CTF compliance officer? Speak with One AML about AMLCO support, AML/CTF program development and Tranche 2 readiness.