Wholesale investor test paper examines calls for change

Stockbrokers and Financial Advisers Association (SAFAA) has today issued a discussion paper examining the question of whether the wholesale investor test should change.

“Calls for change to the wholesale investor test have increased in frequency over the past few years,” said Judith Fox, SAFAA CEO.

“Given the significant implications for stockbrokers, investment advisers and their clients should any change to the wholesale investor test be introduced, it is important that any call for change be supported by evidence,” she noted.

“Our paper aims to facilitate an informed discussion.”

The paper addresses the issues of:

  • whether there is evidence of harm to support calls for change
  • how the test is applied in practice
  • existing regulatory protections for wholesale investors and
  • the consequences for advisers and investors of a change in the test.

“A key question is whether the voice of the client has been sought. Before embarking on any further reform it is important to consider the views of wholesale clients who will be impacted by any change,” Ms Fox concluded.

Two reviews in 2022 are seeking feedback on the test: the Government’s Quality of Advice Review – Draft Terms of Reference and the Australian Law Reform Commission’s Interim Report A Financial Services Legislation ALRC Report 137 (November 2021). Both consultations close in February 2022. 

Judith Fox
CEO, 0408 667 246