As a Kiwi who moved to Australia in 2008, I’ve always enjoyed the friendly rivalry across the ditch, whether it’s rugby scores, who makes the best coffee, or who really invented pavlova. When it comes to AML/CFT compliance, New Zealand accountants unsurprisingly found themselves holding the short straw first.
In October 2018, my ex-colleagues in NZ were pulled into Phase 2 of the AML regime under the Department of Internal Affairs. It wasn’t all smooth sailing. Client onboarding slowed down, paperwork piled up, and tough conversations with clients became the new normal.
The upside? Their experience gives Australian firms a head start. With Tranche 2 arriving here in July 2026, we don’t have to repeat the same mistakes. We can borrow the lessons from across the ditch, skip the teething pains, and be ready for what’s coming.
Onboarding Takes Longer Than You Think
In NZ, client acceptance slowed dramatically once AML rules kicked in. Verifying identities, mapping beneficial ownership of companies and trusts, and clarifying sources of funds/wealth all took time.
Lesson: Build these steps into your workflow from the start and set expectations with clients upfront. Start having those conversations now?
Invest Early in the Right Tools
Manual checks quickly became unworkable. Most firms adopted electronic verification platforms and structured document management to stay on top of compliance.
Lesson: Treat AML tech as core infrastructure, not a “nice-to-have.”. Using excel templates won’t cut it.
Train and Re-Train
Staff initially struggled to spot red flags and know when to escalate. Clear roles (like a designated Compliance Officer) and regular training changed this.
Lesson: Don’t just train once; embed ongoing AML awareness into your team culture.
Prepare Clients for New Norms
Clients didn’t love being asked for passports, utility bills, or wealth documentation — and who can blame them? Firms that explained the “why” early through engagement letters, FAQs, and emails had far smoother onboarding.
Lesson: Over-communicate, so AML checks feel routine rather than intrusive. Again, a good reason to have those tough discussions with clients now rather than later!
Pass Costs Transparently
Absorbing compliance costs wasn’t sustainable. NZ firms introduced onboarding fees or adjusted billing rates, and clients eventually accepted this as the “new normal.”
Lesson: Be upfront about fees and frame them as part of protecting both firm and client.
Use AML to Deepen Advisory
AML’s probing questions often uncovered opportunities in restructuring, governance, and tax risk management. Smart firms used this to deepen client relationships.
Lesson: Don’t just tick the AML box — use it as a springboard to add value.
How Firms Can Implement These Lessons in Australia
With Tranche 2 obligations commencing 1 July 2026, now is the time to prepare. Here’s how Australian firms can turn the New Zealand experience into practical action:
- Workflow redesign: Map out your current client acceptance process and build in AML checkpoints, ID verification, beneficial ownership checks, and source of funds questions. Draft scripts and checklists so staff know what to ask.
- Technology selection: Evaluate Australian ID verification and AML monitoring tools early. Compare pricing, integration with practice management software, and record-keeping features. Budget for this as a recurring operational cost.
- Staff readiness: Nominate your Compliance Officer (who must be a “fit and proper” person under AUSTRAC rules) and set a training schedule. Training should cover:
- recognising red flags,
- escalation procedures for suspicious matters, and
- AUSTRAC reporting deadlines (24 hours for terrorism suspicions, 3 business days otherwise).
- Client communication: Update engagement letters and templates before July 2026. Add plain-English explanations of AML obligations and likely costs. Consider FAQs or website articles that answer, “Why do you need my passport?”
- Fee structure: Decide whether to charge a flat onboarding fee, increase hourly rates, or apply risk-based surcharges. Communicate this upfront to avoid surprises.
- Leverage opportunities: Use AML checks to uncover client needs in areas like structuring, governance, or tax risk management. Position yourself as both a compliance partner and a trusted advisor.
Final Thought: The New Zealand experience shows the transition can be bumpy, but firms that prepared early and framed AML as a professional safeguard, not just a regulation, made the most of it. Australian accountants who act now will be ready for July 2026 and will turn compliance into client confidence.
At dVT Mcleods, we’re not just advisors, we’re accountants ourselves. We know the pressures you face, the risks clients can bring, and the reality of juggling compliance with client service. That’s why we’ve built AML CoreComply, a tailored compliance framework designed specifically for accounting firms.
- We help you map your obligations and design a practical AML/CTF program that works in the real world.
- We provide tools, templates, and training so your team knows exactly what to do.
- We guide you through client communication strategies, so those hard conversations about ID, beneficial ownership, and fees are easier to manage.
- And we make sure that you are audit-ready, minimising risk and protecting your reputation.
Don’t wait until the last minute; start preparing now. With the right partner and the right tools, Tranche 2 doesn’t need to be a burden. It can be an opportunity to strengthen client relationships and future-proof your firm.
From accountants, for accountants: practical AML compliance made simple.
How DVT Mcleods Can Help
At DVT Mcleods, we work with accounting and legal firms to design and implement compliance frameworks that withstand regulatory scrutiny. Our AML/CTF service, CoreComply, is delivered by specialists with expertise in financial crime risk, regulation and compliance. Whether you need a full program build, board training, or a readiness review ahead of Tranche 2, CoreComply gives you access to people with the right skills to help you prepare before the clock runs out.
If you’d like to discuss how these changes will impact your firm, contact us at 02 9633 3333
Source notes:
- Chartered Accountants ANZ summary of NZ AML Phase 2 for accountants.
- Department of Internal Affairs AML/CFT resources for designated non-financial businesses.
- AUSTRAC Tranche 2 implementation timelines and obligations.
