Source of wealth verification is the evidence-gathering step behind the concept of source of wealth, and that entry explains what the term means and why it matters. This page describes how the verification is done in practice.
The aim is to confirm that a customer's total net worth is consistent with a legitimate history: how they earned or acquired it, over what period and from which activities. A firm typically builds a short narrative, for example a career in investment banking followed by the sale of a stake in a technology company, and then corroborates its main elements. Evidence may include tax returns, audited company accounts, published reports of a business sale, property records, employment contracts, wills or probate records, and reputable public sources. Analysts test whether the story is plausible for the customer's age, profession and country, and look for adverse media that contradicts it.
Source of wealth verification is broader and more historical than source of funds verification, which looks only at the money involved in a particular transaction. It is required as part of enhanced due diligence for politically exposed persons under FATF Recommendation 12, and is common practice in private banking and wealth management. It often follows a positive result from politically exposed person screening, and the depth of checks is set by the customer's risk.