Summary Source-of-funds (SoF) and source-of-wealth (SoW) evidencing is a recurring supervisory finding. The gap is rarely policy; it is the operational standard of what "evidenced" means in practice.
Distinguishing SoF and SoW SoF explains the origin of the specific funds moving through the account. SoW explains how the customer accumulated their overall wealth. Both are required in higher-risk relationships; conflating them is a common weakness.
Evidencing standards Each assertion should be corroborated with independent documentation proportionate to the risk: audited accounts, tax filings, sale contracts, inheritance documents. Self-declaration alone is not evidence.
Complex structures Trusts, holding vehicles and intermediated wealth require a documented chain from ultimate source to the customer relationship. Missing links should be treated as controls gaps, not narrative gaps.
Refresh and event triggers Wealth evidence ages. Refresh should occur on defined periodic cycles and on event triggers such as significant inflows or changes in beneficial ownership.
Governance Sign-off standards, escalation thresholds and quality assurance sampling should be defined and applied consistently across the customer book.
Limitations Evidence establishes plausibility, not certainty. Where doubt remains after reasonable enquiry, the correct control is to decline or exit rather than proceed with weak documentation.
Related expertise See [AML and Financial Crime](/expertise/aml).
Frequently asked questions
What should risk leaders know about distinguishing SoF and SoW?
SoF explains the origin of the specific funds moving through the account. SoW explains how the customer accumulated their overall wealth. Both are required in higher-risk relationships; conflating them is a common weakness.
What should risk leaders know about evidencing standards?
Each assertion should be corroborated with independent documentation proportionate to the risk: audited accounts, tax filings, sale contracts, inheritance documents. Self-declaration alone is not evidence.
What should risk leaders know about complex structures?
Trusts, holding vehicles and intermediated wealth require a documented chain from ultimate source to the customer relationship. Missing links should be treated as controls gaps, not narrative gaps.
What should risk leaders know about refresh and event triggers?
Wealth evidence ages. Refresh should occur on defined periodic cycles and on event triggers such as significant inflows or changes in beneficial ownership.
What should risk leaders know about governance?
Sign-off standards, escalation thresholds and quality assurance sampling should be defined and applied consistently across the customer book.