KYC/AML document checklist for financial advisors.

What is KYC/AML?

Know Your Customer (KYC) is the process of verifying client identity and understanding the nature of the client relationship. Anti-Money Laundering (AML) is the set of regulations designed to detect and prevent the use of financial services for money laundering and terrorist financing. For registered investment advisers, broker-dealers, and financial institutions, Customer Identification Program (CIP) requirements under the Bank Secrecy Act specify minimum KYC collection standards.

Individual client KYC checklist

Identity verification

• Full legal name
• Date of birth
• Residential address (no P.O. boxes)
• Government-issued ID type and number (driver's license, passport, national ID)
• Tax identification number (SSN for U.S. persons, or ITIN for foreign nationals)

Source of funds and wealth

• Current employment status and employer name
• Occupation and job title
• Annual income range
• Source of funds for the account (employment income, inheritance, sale of property, business income, gift)
• Source of wealth (how the client accumulated their overall wealth)
• Net worth range

Risk factors and attestations

• Politically Exposed Person (PEP) status — Is the client a senior political official, or a family member or close associate of one?
• Foreign government official status
• Purpose of the account and nature of the anticipated activity
• Expected transaction types and frequency

Entity client KYC checklist

Entity identification

• Legal entity name
• Entity type (corporation, LLC, partnership, trust, etc.)
• State/country of formation and registration number
• Principal place of business address
• Tax identification number (EIN)
• Nature of business

Beneficial ownership (FinCEN rule)

For legal entity clients, the FinCEN beneficial ownership rule requires identification of all individuals who own 25% or more of the entity, plus one individual with significant control. For each beneficial owner:

• Full legal name
• Date of birth
• Residential address
• Government-issued ID type and number
• Tax identification number
• Ownership percentage

When to collect KYC information

• New client onboarding — Full KYC collection is required before opening an account or beginning an advisory relationship.
• Periodic re-verification — KYC information should be reviewed and updated on a risk-based schedule (typically every 1-3 years for standard-risk clients).
• Trigger events — Re-verification may be required following significant changes in the client's circumstances, large or unusual transactions, or changes in ownership of an entity client.

Documenting your KYC process

Regulators expect that firms not only collect the required information but maintain records demonstrating that collection occurred. A structured digital intake process with a timestamped audit trail is significantly easier to defend in an examination than paper questionnaires or email-based collection.

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