The Fraud Squad is warning IFAs they face prison unless they 'grass' on suspected money launderers as it steps up a campaign to bring them to book.
Police forces are urgently trying to curb the rising tide of money laundering from drug related crimes which saw them make more than 22,000 applications for financial disclosure of accounts of potential criminals last year.
And they have told IFAs they face a maximum of five years behind bars if they fail to report client they suspect is laundering drug money.
Police believe financial intermediaries are in the ideal position to spot criminals attempting to hide large sums of crime related money in legitimate financial outlets such as investment trusts, pensions or endowments.
They are seeking to use them in the front line of their fight against laundering want IFAs to look out for clients reluctant to provide identification, cancelling large investments soon after making them or cancelling cheques or bank transfers made payable to the IFA claiming circumstances have changed.
Fraud Squad detective inspector Charlie Dickin says: “IFAs have a responsibility to report any suspicion of money laundering not just because of their own industry's compliance rules but because of the human misery.
“The question of client confidentiality is often raised but the financial adviser is the police informant not the complainant so their identity is protected.”
World Money Laundering Report editor Nigel Morris-Cotterill says: “If IFAs fail to report to the police anyone they suspect of laundering drugs money they could end up going to prison for five years.