A dedicated AML hire is a fixed cost in a market that never stays still. Here's how salary and service fee compare when listings rise and fall.
As we head into summer, this is when costs tend to go up. Listings climb, enquiries pick up, and every new client relationship brings an AML check with it. Four months into Tranche 2, principals are working out what that workload really costs, and whether the person doing it should be on the payroll.
There are two broad options principals need to be asking: Employ someone to run AML in-house, or pay a specialist provider a fee for each check and have them do the work. Both are legitimate choices but behave very differently when the market moves.
The case for a salary
A dedicated compliance person sits in your office. They know your agents, your clients and how your business runs. Questions get answered across the desk. If you have steady, high volume and the right person, that familiarity has real value.
The cost goes well beyond the salary. Add superannuation, leave, recruitment, training, and the months it takes a new hire to understand AML well enough to make sound calls on trusts, companies and screening matches. Experienced AML people are scarce in Australia, and most of them work in financial services.
What happens when the market moves
Real estate volume is never flat. In a strong market, one compliance person can fall behind quickly. Checks queue up, complex files sit unresolved, and the agency either hires a second person or lets the backlog grow. Recruiting takes months. The spring rush won't wait for it.
In a soft market, the reverse happens. Listings drop, checks drop, and you are still paying a specialist salary for a role with much less to do. You are carrying an expensive resource that is partly idle, and that cost doesn't fall with your revenue.
There is also key-person risk. If your one compliance person goes on leave or resigns, the knowledge of how your program runs often walks out with them.
The case for a service fee
Outsourcing turns AML from a fixed cost into a variable one. You pay for the checks you run. When volume rises, the provider absorbs it without you recruiting. When volume falls, so does the bill.
You also get people who do this work full-time, across many businesses, and who have seen the unusual files before. That matters most on the work that takes longest: identifying who really owns or controls a trust, resolving a possible sanctions match, and deciding whether something should be reported to AUSTRAC.
A service fee does rise in a busy month. The difference is that it rises alongside the transactions generating your income, rather than sitting fixed when they aren't.
What outsourcing doesn't change
This is the part some agencies miss. AUSTRAC's guidance is clear that if you outsource AML/CTF functions, your business remains responsible for its obligations and generally remains liable for any breach.
So an outsourced model still needs oversight. AUSTRAC recommends a written, legally binding agreement with your provider, and your AML/CTF program should document how the arrangement works. In practice, the principal and compliance officer should know what the provider does, how quickly, how exceptions are escalated, and how they would find out if something went wrong. A good provider makes that easy to see. If yours can't, that tells you something.
What I saw in banking
In banking, AML involves ongoing customer screening and transaction screening across large volumes of data. In my experience, those processes were deeply connected to the bank’s systems and too data-heavy to readily outsource.
Real estate is different. The work is generally more transactional, and the screening requirements are simpler than those of a bank monitoring customers and payments continuously. That makes it more practical for an agency to use a specialist provider, with compliance experts handling complex ownership structures, screening matches and other matters that need closer attention.
Keep ownership and oversight with the principal and the compliance officer. Let routine volume and complex casework sit with people built to handle it. At AML Partners, that is how we structure our managed service: we run the checks and the casework, and the agency keeps clear visibility and the final say.
The question worth asking
Pull up your listing numbers for the past three years and look at the peaks and troughs. Then ask two things. If volume doubled next spring, who would do the checks? And if it halved, what would you be paying for?