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SPAA welcomes clarification of wholesale investor test

12 August 2014 — 1 minute read

The SMSF Professionals’ Association of Australia (SPAA) has welcomed the move by ASIC to clarify the working of the wholesale investor test and how it relates to SMSF professionals and trustees.

SPAA chief executive Andrea Slattery said ASIC’s previous position, as expressed in QFS 150, created uncertainty as to when the wholesale client test applied to an SMSF trustee receiving advice on a financial product.

“SPAA strongly believed that the requirement that an SMSF had to hold $10 million of net assets was an incorrect interpretation when the advice was relevant to an investment being made by an SMSF trustee,” Ms Slattery said.


The clarification, which was issued last week, allows SMSF trustees to be treated as wholesale clients where they have net assets of at least $2.5 million, or income of $250,000 a year for the past two financial years, or where the relevant investment is worth a minimum $500,000, Ms Slattery noted.

However, SPAA believes there is still uncertainty about how the $2.5 million asset test applies to SMSF trustees, she added.

“ASIC’s statement says that the threshold applies ‘if the trustee has net assets of at least $2.5 million’. We need clarification from ASIC whether this means only assets in the SMSF, the member’s balance in the SMSF, and also includes the trustees’ personal assets outside superannuation,” Ms Slattery said.

“The interpretation of this issue is fundamental to how the wholesale investor test functions, not only to trustees but to the accountants that issue certificates stating that an investor meets the wholesale investor test thresholds.”

SPAA welcomes clarification of wholesale investor test
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