Case Study:
When Previously Accepted Documents Cannot Be Relied Upon
wb.group assisted a client in understanding why a source-of-funds declaration previously accepted by another provider could not be relied upon in a transfer-in engagement, and what an acceptable replacement document needed to achieve.
Problem:
During a transfer-in engagement, a client provided a source-of-funds declaration that had been used by a previous provider. The document looked familiar and had been accepted before. On closer review, it contained wording that explicitly excluded reliance by third parties.
This was not a minor technical issue. A declaration that excludes third-party reliance cannot form the basis of another firm’s compliance obligations, regardless of how many times it has previously been accepted or how detailed its contents are.
Our Intervention:
Rather than simply declining the document, we explained why reliance matters from both a regulatory and risk management standpoint, why documentation accepted under legacy practices does not always align with current standards, and what a replacement needed to achieve functionally.
The client understood that the requirement was not procedural obstruction. Source-of-funds documentation that can be relied upon protects all parties, including the client. The standard exists for substantive reasons.
Positive Outcome:
The client obtained a replacement declaration that met the required reliance standard and the engagement proceeded without further delay.