Source of wealth and source of funds are treated as the same question and are not. One asks how a person came to have money at all. The other asks where this particular money came from. Enhanced due diligence usually needs both, and the first is the one that gets a vague answer written into a file and never questioned again.
The difference, and why it matters
Source of funds is about a transaction or an account: this money came from the sale of a property, or from a named employer. Source of wealth is about the person: they built and sold a business, they inherited, they have been paid a professional salary for twenty years. A file that establishes funds and not wealth can explain one payment and nothing about the customer, which is exactly the gap enhanced due diligence exists to close.
What evidence is usually enough
Enough to make the picture coherent rather than exhaustive. A stated origin, corroborated by something independent, and a note explaining why the corroboration is proportionate to the risk. What is not enough is a sentence in a field with nothing behind it, and what is disproportionate is demanding decades of documentation from a customer whose profile is ordinary. Your policy should say what level of corroboration each rating expects so this is not decided customer by customer.
Ask it at the right moment
The question is far easier to ask at onboarding than a year later, when the relationship is established and the request looks like an accusation. For any customer your model rates up, the source of wealth question belongs in the initial conversation, framed as standard rather than as a concern. Firms that defer it end up either not asking or asking badly, and the file records the discomfort rather than the answer.
Questions people ask about source of wealth
Is source of wealth needed for every customer?
No. It is normally an enhanced due diligence question, asked where the rating warrants it, which is one of the reasons the rating has to come before the evidence set.
What is the difference between source of funds and source of wealth?
Funds is where this money came from. Wealth is how the customer came to have money at all. Enhanced files usually need both, and the second is the harder one to evidence.
How do we record it defensibly?
The stated origin, what corroborates it, why that corroboration was judged proportionate, who accepted it and when. A one-line answer with no basis is the field most likely to be challenged and least likely to survive.