ACIP publishes best practices papers relating to risks in wealth management and source of wealth due diligence

25 June 2025

On 14 May 2025, the AML/CFT Industry Partnership (“ACIP”), a public-private partnership addressing money laundering and terrorism financing risks facing Singapore, published the following best practices papers:

  • Best Practices in Relation to Risks in Wealth Management
  • Best Practices on Source of Wealth Due Diligence

Best Practices in Relation to Risks in Wealth Management

This paper consolidates industry knowledge and shares case studies and best practice recommendations on certain risk areas in relation to financial institutions’ (“FIs”) dealings with wealth management (“WM”) customers. The paper examines how FIs providing WM services in Singapore can strengthen their defences against identified risks arising from the following areas:

  • The use of wealth management structures (which include family offices and complex structures).
  • Macro-economic developments and events which have resulted in shifts in assets and funds flows towards more economically and politically stable jurisdictions such as Singapore, but which also bring potential risks in respect of shifting client demographics, exposure to new risk-typologies, and the increased risks that clients shift assets to take advantage of differing requirements across jurisdictions.
  • The increase in remote (non-face-to-face) onboarding processes arising from the increased digitalisation of banks’ processes.
  • Clients presenting heightened risk as a result of their nationality and residence information, such as the holding of “golden passport” citizenships, or indicators of multiple nationalities.
  • Potential risks arising from relationships with external asset managers or financial intermediaries whose “engagement model” may make it more challenging for banks to detect red flags in the end-client relationship.
  • The ongoing monitoring challenges posed by changes in client profile across the client lifecycle, including the ongoing transactional and static data interactions by clients during the course of the client relationship.

Best Practices on Source of Wealth Due Diligence

This paper brings together industry knowledge and recommended practices to provide additional clarity and alignment on the principles and the practices of source of wealth (“SoW”) due diligence that FIs (including non-banks) can consider, including the calibrations that can be considered for customers in the different banking segments, i.e. private banking, retail, and corporate banking. It shares best practices in the following areas:

  • A tiered approach to SoW risk identification and corroboration across the (i) private banking and wealth management; (ii) retail banking; and
    (iii) corporate banking segments.
  • SoW corroboration in relation to various wealth scenarios, such as (i) inheritances and gifts; (ii) business ownership; (iii) investment gains;
    (iv) sale of goods that cannot be easily valued (e.g. art, web domains, and non-fungible token assets); and (v) employment income, as well as the execution of risk mitigation controls.
  • Ongoing monitoring of customers’ SoW.
  • Senior management oversight, covering areas such as (i) risk appetite; (ii) when escalations are required; (iii) governance; and (iv) risk mitigating measures.

Reference materials

The following materials are available on the Monetary Authority of Singapore website www.mas.gov.sg: