The three-part test for a file note that’ll survive an SRA review

A file note that survives an SRA review now comes down to a genuinely simple, three-part test: what’s the fact, how do you know it’s a fact, and what does it mean.

It didn’t always need to. For years, a file note that said “client confirmed, no concerns, proceed” was enough. It ticked the box the regulations asked you to tick, and that was the job done. That box has gone.

In our recent webinar, “Beyond the blanket: the 2026 MLR changes explained”, Ray Blake of The Dark Money Files sat down with Thirdfort’s Harriet Holmes to unpack what the narrowed enhanced due diligence (EDD) trigger actually means in practice. The headline change is that fewer situations automatically require EDD. The less-talked-about consequence is that your file notes now have to do far more work than they used to.

So what does a defensible file note actually look like now?

What a good file note needs

A good file note says three things: what’s the fact, how do you know that’s a fact, and what does it mean.

Broken down, that’s:

The fact - what are you actually looking at? A source of funds, a transaction, a client’s stated occupation.
The evidence - how do you know it’s true? Not an assumption, a specific document or data point you can point to.
The judgment - what does that mean for this client, this matter, this risk decision?

Take a simple example: a customer has earned the money they’re bringing into a transaction from their own business. How do you know? Audited accounts, and money moving through a bank account. What do you conclude? That the funds are consistent with their legitimate earnings, so you’re comfortable proceeding on a low-risk basis.

Three sentences. No checklist, no tick box - and it holds up because each step earns the next one.

Why this matters more now than it used to

Under the old regime, a firm could lean on the regulations to make the call for them: if a client or transaction met a specific trigger, EDD was mandatory, and that was the evidence of a decision being made. Now that fewer triggers apply automatically, an inspector, auditor or supervisor looking at your file isn’t just checking whether EDD happened. They’re checking whether you can show your reasoning got you there, or didn’t need to.

That’s exactly the shift the SRA’s thematic review this year is expected to focus on: proving that what’s meant to be happening on paper is actually happening in practice, at file level.

Your firm-wide risk assessment does half the work for you

The three-part test gets much easier to apply consistently if your firm-wide risk assessment has already defined what “normal” looks like for your firm. If your risk assessment is specific about the types of business, clients and transactions you typically handle, a fee earner filling in a file note isn’t starting from a blank page. They already have a working definition of what counts as usual, so the note only needs to explain the judgment for whatever falls outside it.

Where firms tend to trip up is when the risk assessment and the day-to-day file work are written by different people who rarely talk to each other. The person who wrote the firm-wide risk assessment understands the reasoning behind it, but the people applying it case by case often don’t have the same visibility. That disconnect is what opens a gap between what the firm says it does and what actually gets written down on individual files. Keeping those two things genuinely connected, not just filed in the same place, is what makes the three-part test something your whole team can apply consistently, not just the person who designed it.

Put it to the test on your own files

Not sure how your firm’s file notes would stack up against this? Our free AML file review checklist template gives you a practical five-step process for auditing a sample of your own files, so you can spot the gaps before an inspector does.

Get your free AML file review checklist template

Make the judgment easy to see

The regulations no longer do your thinking for you, and that was always going to put more weight on what gets written down. A file note built on fact, evidence and judgment gives an inspector exactly what they’re looking for: not just that a decision was made, but why it was the right one.