Compliance Isn’t Optional: What 179 Firms Got Wrong and How to Get It Right

The ICAEW’s latest Practice Assurance Monitoring Report 2025 highlights a worrying trend: too many firms are still falling short on the basics of compliance. While most firms demonstrated high standards of client service and technical competence, the monitoring revealed persistent gaps in areas that regulators have been flagging for years, from fee transparency to AML checks and client data protection. These aren’t minor oversights; they’re systemic weaknesses that can expose firms to regulatory action, reputational damage, and loss of client trust.  

In fact, hundreds of firms were flagged for avoidable compliance failures that could have been prevented with clearer onboarding, stronger AML protocols, and better data governance. If you're still relying on outdated processes, now’s the time to rethink how you onboard, verify, and protect your clients.   

Key Takeaways:  

Engagement Letters & Fee Transparency  
179 firms failed to clearly communicate fee structures and complaints procedures. These don’t need to be formal engagement letters, terms of business, brochures, or even initial email paragraphs are acceptable. But they must be written.  

AML, KYC & PEP Checks  
30 firms were reported for serious AML failures. That includes missing contracts for connected entities and ignoring previous review feedback. KYC and PEP screening aren’t optional: they’re foundational.  

Client Data Protection  
34 firms hadn’t registered with the ICO. 14 lacked GDPR-compliant procedures. Data protection isn’t just about ticking boxes, it’s about trust.  

Clients’ Money Handling  
From missing bank trust letters to unauthorised fee deductions, the breaches were widespread. Every five-week reconciliation isn’t a suggestion: it’s a requirement.  

Conclusion:  
Compliance isn’t just about avoiding penalties; it’s about building credibility. Practice Gateway helps firms automate onboarding, embed compliance, and protect client data from day one. Because getting it right shouldn’t be hard.  
  
*Full report here: Practice Assurance Monitoring Report 2025 | ICAEW