Another firm's source-of-funds question does not enrol you

The question comes up when a firm that does not provide a designated service, or does not think it does, is copied on an email from a firm that does. Checked against AUSTRAC's overview of initial customer due diligence on 5 October 2026. This is general information, not legal advice. This page does not reproduce that guidance. When source of funds is and is not required is source of funds is not always required. The difference between the two ideas is source of funds and source of wealth. The heavier version of the work is enhanced customer due diligence. The sector map is /tranche-2.

Why the other firm is asking

AUSTRAC says that before a designated service starts, a reporting entity establishes stated matters on reasonable grounds. Source of funds and source of wealth are not on that list for every customer. They are required for foreign politically exposed persons and for high-risk domestic or international organisation politically exposed persons. They are also required, where enhanced customer due diligence applies, if relevant to the customer's money laundering or terrorism financing risk. A firm that asks is often doing that job. Sometimes it is asking out of habit, beyond what its own program requires. Either way, the duty sits with the firm that provides the designated service.

Your firm does not inherit the duty because you act for the same human. If you do not provide a designated service, you are not a reporting entity and you do not enrol so that you can answer their email in a compliant tone. If you do provide a designated service on a different matter, you still run your own program. You do not become their compliance officer by sharing a client. The client is allowed to explain their own money. Put them in direct contact with the firm that asked, unless there is a reason on your file, such as privilege, to handle the request yourself. This page will not decide that privilege point.

What not to do with the email

• Do not ask if they have lodged a report. That question pushes them toward tipping off, and it teaches your client the wrong topic.
• Do not tell your client “they must have reported you”. You do not know, and saying it is how rumours start.
• Do not invent documents. A source-of-funds answer is the client's account, with whatever records they actually have. A letter you draft to make the story neater is a different professional risk.
• Do not enrol to feel helpful. Enrolment is for businesses that provide a designated service. A mistaken enrolment leaves you on the Roll, with obligations such as the annual compliance report, until you are removed.
• Do send the client to the firm that asked, with the question repeated plainly: where did this money come from, and what can you show.

If you might be a reporting entity after all

Some firms discover, in the same week, that the other side wants source of funds and that their own work might be a designated service. Separate the two. Their question is about their customer. Your status is about your services. Read the tables before you answer “we are out”. A firm that assists on a transfer, holds money for a transaction, or acts as an officer of a client company may be in, even if it also does work that is outside the tables. Being asked for source of funds is not the test. The service you provide is the test.

If you are in, and your program requires a check, email the client a link. Do not collect identity documents because the other firm asked you to “just get ID”. Their request is not your procedure. FreeAML does not answer source-of-funds questions and does not speak to the other firm.

Where this page stops

This page is the cross-firm question. It is not how you speak to your own client about the regime, which is how to talk about AML with clients.

What the client pays

On FreeAML the firm suite is A$0. The firm emails the client a link. Verification is client-pays. On the public list a personal KYC check is A$20 and a company or trust KYB check is A$40. There is no subscription. Confirm the live amounts on FreeAML pricing. Another firm's due diligence is not a FreeAML charge. If your firm later runs a check, that check is client-pays.

Frequently Asked Questions