The question is broader than one payment
Source of wealth concerns how a person accumulated their overall wealth and assets. A source-of-funds explanation concerns money used in a particular transaction. The two can be related, but one does not automatically answer the other. A recent sale may explain a payment while leaving the origin of the asset unexplained.
The relevant level of enquiry depends on the applicable duties and risk. This is not an instruction to reconstruct every financial event in a person's life. It is a way to understand the material explanation needed for the customer and service being assessed.
- Source of funds and source of wealth: Source of wealth
- AML/CTF Rules 2025: Sections 6-21 and 6-23
- AML/CTF Rules 2025: Section 5-2(2)
- Business history
In this example, wealth came from building and selling a business.
- Assets and proceeds
Explain the material sources of the accumulated wealth.
- Current transaction
Identify which money will fund the proposed transaction.
Separate wealth history from a current transfer
Hypothetical example. Wealth history and transaction funds are related questions with different evidence needs; applicable duties and risk determine the enquiry.
Follow the process from top to bottom.
Apply the particular requirement
Rules 6-21 specifies funds and wealth matters for certain enhanced CDD circumstances where they are relevant to the nature of the customer's risk. Rules 6-23 contains separate initial CDD requirements for specified PEP cases. These provisions should not be collapsed into a claim that every enhanced case requires an identical financial history.
A business also needs policies addressing when it collects, or collects and verifies, relevant information. Read the condition before choosing the evidence. A customer's current balance is a fact about their present position; it is not necessarily evidence of how that position was created.
Worked example: ownership of a business
A fictional customer explains that most wealth came from building and later selling a business. The transaction now proposed will use money from an investment account. The investment-account transfer may help explain the immediate funds movement, while the business history addresses the broader wealth explanation.
The reviewer considers whether the information is consistent and what evidence is appropriate to the identified risk. The example does not require the same historical documents from every customer. It illustrates two linked questions with different evidence needs. A reviewer should record which part of the explanation each item supports.
- Wealth history
How did the person build their overall wealth?
- Current payment
Where did the funds for this transaction come from?
- Supporting evidence
Connect each explanation to suitable evidence. One answer does not automatically establish the other.
Wealth history and this payment answer different questions
Read this visual with the source conditions and explanation in this section.
Separate evidence questions. An answer to one does not settle the others.
Explain how wealth accumulated
As a practical method, summarise the material sources and sequence in a few plain sentences before deciding whether more information is needed. If the explanation depends on an asset that appeared without an understood origin, identify that gap. If a source is immaterial to the risk being considered, avoid letting it distract from the main question.
Keep customer statements and the business's conclusions distinct. Explain unresolved inconsistencies rather than replacing them with a confident label. This method can make a complex file easier to review, but it is not a formula for accepting a customer or proof that wealth is lawful.