Source of wealth
Source of wealth (SoW) is the origin of a person's or company's overall wealth: how they came to own all the money and assets they have, such as employment income, business profits, an inheritance or property sales. Banks, EMIs and other obliged entities check it as part of enhanced due diligence, to make sure a client's net worth is consistent with what they know about them.
Why source of wealth matters
Source of wealth checks help financial institutions prevent money laundering and terrorist financing. Criminals who move illicit funds through the financial system often have wealth that their known activity can't explain, so checking where wealth came from is one of the few ways to spot it before the money moves. For the provider, weak AML controls are both a regulatory and a legal risk: supervisors can impose fines and other regulatory enforcement if a firm accepts high risk customers without understanding their wealth.
Source of wealth vs source of funds
The two terms are often confused. Source of funds asks where the money for a particular transaction or account comes from. Source of wealth asks how the client accumulated everything they own.| Source of funds (SoF) | Source of wealth (SoW) | |
|---|---|---|
| Question | Where does this money come from? | How did the client build their wealth? |
| Scope | A specific transaction or the funds used in the relationship | The client's total net worth and other assets |
| Example | The EUR 200,000 paid in came from the sale of a flat | The client built their wealth from 15 years of salary, a business sale and dividends |
| When it's checked | Standard and enhanced due diligence | Mostly enhanced due diligence |
| Typical evidence | Bank statements, a sale contract for that payment | Employment contracts, company accounts, inheritance documents |
When source of wealth checks are required
EU anti money laundering law requires source of wealth checks in higher risk situations, as part of enhanced due diligence:- for politically exposed persons, their family members and close associates
- for business relationships and transactions involving a high risk third country
- where the provider's own risk assessment shows a higher risk, for example large sums, complex or opaque ownership structures, or a customer's circumstances that don't fit their transactions
Common sources of wealth
Most people's wealth comes from a few sources, often combined:- employment income, bonuses and pension savings built up over a career
- business ownership: profits, dividends, or the sale of a company or shares
- investments, such as shares, funds, bonds or rental property
- an inheritance or a gift from a family member
- the sale of a property or other major asset
- other one off events, such as a compensation award, a legal settlement or a lottery win
Source of wealth for business clients
For a company, the check usually covers two levels:- the company itself: how it built its assets, from business profits and retained earnings, investor funding rounds, loans, grants or the sale of a business line
- its ultimate beneficial owners: how the people who own or control it became wealthy enough to found or fund it
What evidence providers accept
Providers want documents that show how the wealth was built, not just that it exists. Common evidence:| Source of wealth | Supporting documents |
|---|---|
| Employment income | Employment contracts, payslips, tax returns |
| Business profits or a business sale | Financial statements, a share purchase agreement, dividend records |
| Dividends and investments | Company accounts, dividend vouchers, investment portfolio statements |
| Inheritance or gifts | A will or grant of probate, a letter from the executor or lawyer, a gift letter |
| Property sales | A sale contract or completion statement |
| Crypto-assets | Exchange statements, wallet transaction history, tax filings that show gains |
| Loans | Loan agreements and bank statements showing the funds |
How providers assess it
The provider compares the explanation and documents with everything else it knows: the client's profession, age, business, country and expected activity. It checks whether the claimed sources add up to the wealth declared, and whether any part looks unexplained or linked to criminal activity, tax evasion or other financial crimes. Gaps lead to more questions, conditions on the account or, if the risk can't be managed, a refusal. Source of wealth is reviewed again as part of ongoing monitoring, for example when the client's activity changes.Red flags in source of wealth checks
Compliance teams look for signs that wealth may come from criminal activity or can't be explained:- wealth far above what the client's employment income, business activities or age would suggest
- large sums with no clear origin, or recent wealth that appeared suddenly
- wealth built in high risk jurisdictions, or through opaque ownership structures and nominee shareholders
- reluctance to provide supporting documents, or documents that contradict each other
- unexplained transfers from a family member or associate who is a PEP
Example: a founder opening a business account
A software company with two founders applies for an account and expects EUR 3 million in investor funding. The provider asks for the company's source of funds (the share subscription agreements and the investors' payments) and, because one founder is a former deputy minister, for that founder's source of wealth. She explains her wealth from twelve years of salary in the public and private sectors, the sale of a consulting business and an inherited flat, and provides employment contracts, the share purchase agreement and the probate document. The story adds up, the file is approved by senior management and the account opens with enhanced monitoring.Source of wealth during customer onboarding
Source of wealth questions usually come up during customer onboarding, after the provider has identified the client and its beneficial owners as part of its KYC measures. The provider first builds the customer's risk profile, from factors such as the type of client, its countries of operation, the products it wants and its expected activity. If that profile points to enhanced due diligence, the provider asks about source of wealth before it opens the account, and senior management usually has to approve the relationship. The same questions can come back later, if the client's activity or financial situation changes significantly.Who carries out source of wealth checks
All obliged entities under EU anti money laundering law can be required to check source of wealth: banks, EMIs and payment institutions, crypto-asset service providers, investment firms, insurers, and professional services such as law firms, accountants and estate agents. They must keep the evidence for at least five years after the business relationship ends, so they can show regulators how they reached their decision.How to prepare
If you expect enhanced due diligence, for instance because you or a shareholder hold a public function or your structure spans several countries, prepare a short summary of how the wealth was built before you apply. Back each major source with one or two documents, and explain anything unusual upfront. A clear, consistent file is the quickest way through onboarding.FAQ
Source of funds is where the money for a specific transaction or account comes from. Source of wealth is how the client accumulated their total wealth over time.
Usually because enhanced due diligence applies: you're a PEP, there's a link to a high risk country, or your profile and expected activity carry a higher risk.
Rarely on its own. It shows that money exists, not how it was earned. Providers usually want documents such as employment contracts, company accounts or sale agreements.
Yes. Providers look at how the company built its assets and at the source of wealth of its beneficial owners.
Yes, in higher risk cases. Standard KYC checks who the client is. Source of wealth is an enhanced due diligence measure that explains how the client became wealthy.
The provider may ask for more information, set limits on the account or decline the relationship if it can't manage the risk. It may also have to report suspicions to its financial intelligence unit.
Related terms and sources
Source of funds · Enhanced due diligence · Politically exposed person · Customer due diligence · Ultimate beneficial owner · High-risk third country · Browse the full glossary
Last reviewed November 2, 2026Disclaimer
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
What We Offer
IBAN Accounts For Your Business
Support & Compliance
Narvi Knowledge Center
Alternative Investment Funds [whitepaper]Family Offices [whitepaper]Shipping Industry [whitepaper]How to Open a Business Account in FinlandNarvi vs. Wise, Revolut, N26, and other alternativesNarvi vs. Stable.comNarvi vs. payabl.Narvi vs. ConnectPayNarvi vs. IBAN4UNarvi vs. GenomeNarvi vs. PaxumNarvi vs. BilderlingsNarvi vs. NetellerNarvi vs. KontistPayments BlogPayments Glossary
Narvi Payments Oy Ab is an Authorized Electronic Money Institution (EMI). Narvi’s EMI license is granted by the Finnish Financial Supervisory Authority (FIN FSA) with the registration number 3190214-6. Narvi’s license is passportised to all European Union countries.
Built and regulated in Finland© 2026 Narvi. All Rights Reserved.
v1.331.0