Source of funds
SoF
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The origin of the specific assets brought into a business relationship or transaction.
Typical evidence includes bank statements, sale contracts, inheritance documents or dividend resolutions.
In practice
The source of funds is evidenced for the specific assets brought in – for example with sale contracts, inheritance documents, dividend resolutions or statements from the transferring bank. It is distinct from the source of wealth, which explains how the family's total wealth developed over time. In practice, both are made plausible, filed with a date and supplemented when significant new assets arrive, so that the documentation grows with the wealth.
Distinctions and common mistakes
The source of funds has to be updated with each significant inflow; it is not settled once at onboarding. A typical mistake is to accept a transfer from another bank as sufficient evidence without asking how the assets got there in the first place.
Relevant in: Switzerland · Germany · Austria · Liechtenstein · EU-wide
Related terms
- Source of wealth
- How a person's total wealth came about, for example through entrepreneurship, inheritance or employment.
Mentioned in these guides
- Swiss Form A: establishing the beneficial ownerWhen Swiss banks require Form A, what it contains, how it differs from Forms K, T and S and how family offices maintain it efficiently across banks.
- The KYC process in a family office: from onboarding to periodic reviewThe full KYC process in a family office: pre-screening, identification, risk rating, approval, ongoing monitoring, event reviews, periodic review and exit.
- Evidencing source of wealth: the evidence matrixWhich documents evidence the source of wealth and funds – by source: earnings, sale of a business, inheritance, gift, real estate, investment income, crypto.