Definition
Source of wealth means how a client accumulated their overall assets — the economic, business or family history behind their total wealth, as opposed to source of funds, which traces the specific money in one transaction. Under the AMLR it is central to enhanced due diligence on high-net-worth relationships, defined by a cumulative test of €5m+ in assets handled for a client with €50m+ total wealth.
What it is
Source of wealth is the wide-angle question in client due diligence: how did this person come to hold the assets they hold? The answer is a narrative supported by evidence — a business built and sold, a career in a well-paid profession, inherited family wealth, long-term investment returns — rather than a single bank statement.
The contrast with source of funds matters. Source of funds traces the specific money in a particular transaction; source of wealth explains the client's overall position. Enhanced due diligence typically requires both, because a plausible transaction can sit on top of an implausible fortune, and vice versa.
Why it matters for Irish firms
Irish designated persons already apply enhanced due diligence — including source-of-wealth checks — in higher-risk situations under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, with politically exposed persons the most familiar trigger. The discipline is the same as elsewhere in the file: ask, evidence, record. A source-of-wealth narrative that is asserted but never corroborated is the sort of gap an inspection finds quickly.
What changes under the AMLR
Regulation (EU) 2024/1624 (AMLR), applying from 10 July 2027, introduces a prescribed enhanced due diligence category for high-net-worth relationships. The test is cumulative: it is aimed at relationships involving the handling of assets of €5 million or more for a client whose total wealth is €50 million or more — both limbs together, not either alone. For firms serving wealthy clients, that makes source-of-wealth assessment a defined regulatory exercise rather than a judgement call: establishing whether a client crosses the €50 million threshold is itself part of the work. AMLA, the new EU AML authority, is due to issue guidance on the €50 million total-wealth test by 10 July 2027, so the detail of how to measure it is still landing — worth tracking before the application date.
How CompliDesk helps
CompliDesk Ireland builds source-of-wealth and source-of-funds capture into its EDD workflows, with the AMLR high-net-worth triggers reflected in the templates — see the AMLR explainer for the full picture of what changes in 2027.
General information, not legal advice. This definition provides general information about EU and Irish anti-money-laundering requirements. Regulatory detail is still evolving through 2026–27 — verify against primary sources (EUR-Lex, AMLA, and your sector’s Irish supervisor) and seek qualified advice before acting.