Source of wealth verification is a due diligence process in which financial institutions and insurers seek to understand how a client accumulated their overall wealth, not just the origin of specific funds used in a transaction. It goes beyond source of funds checks to look at career history, business ownership, investments, inheritances, and other legitimate means through which wealth was built. The goal is to ensure that a client's financial profile is consistent with their known background and to identify potential money laundering, tax evasion, or corruption risks. Source of wealth verification is particularly important for high-net-worth clients, politically exposed persons, and large or complex insurance and investment arrangements.

Advisors encounter source of wealth verification when onboarding affluent clients or arranging sizable premium financing, large single premiums, or private placement life insurance. Compliance teams may request additional documentation such as business financials, sale agreements, tax returns, or inheritance records to corroborate a client's explanation of wealth. Advisors help clients provide clear, consistent narratives that match available evidence. While clients may find questions intrusive, explaining regulatory expectations and anti-money laundering obligations can ease concerns. Understanding source of wealth verification enables advisors to anticipate information requests, avoid delays on large cases, and protect both the firm and client from regulatory and reputational risk.