What Is A Wholesale Investor ?

A Sophisticated Investor or Wholesale Investor, needs to meet certain assets and/or income tests. These particular Investors can access a range of investment opportunities that are not available to retail investors.

In Australia there are a range of investment products that are only available to a Sophisticated Investor. They are generally more experienced or qualified to invest in financial products and therefore do not need the range of regulatory protections that are provided to retail investors.

An investor can achieve this status in one of two ways. Either by meeting the sophisticated investor test, or instead meeting the professional investor test.

Sophisticated Investor
Source: Unsplash


The term “Sophisticated Investor” qualifies certain investors for specific investment opportunities. Sophisticated Investors, unlike retail investors, possess a higher level of financial literacy and knowledge. As a result, the law doesn’t mandate the same level of information and support for them as it does for retail investors.

This allows these investors to access a broader range of investment opportunities not available to retail investors. Investments can be offered and made without the relatively complex disclosure rules required by law for retail investors, such as prospectuses and product disclosure documents.

The Sophisticated Investor Test

Under the Corporations Act which was introduced in 2001, to be classified as a sophisticated or wholesale investor the client must:

Wholesale Investor Test Requirements
Criteria to become a wholesale / sophisticated investor (Corporations Act 2001)

Sophisticated Investor Certificates are valid for two years, and an initial investment must be made within six months of the certificate being issued.

Investors can also access sophisticated and wholesale opportunities if investing A$500,000 or more.

What are the Benefits and Risks Associated?

Wholesale investors can access a range of other investment opportunities that are not available to retail investors.

These include, for example:

  • Unlisted securities,
  • Property syndicates
  • Hedge funds
  • Specific initial public offerings
  • Angel investment opportunities


However sophisticated investors surrender the protections and disclosure requirements that are provided to retail investors. They are assumed to understand capital markets opportunities and to have a high level of financial literacy.

Wholesale investors lose the retail protections provided by the Corporations Act. This includes financial services guides, statements of advice, prospectuses and other documentation, and access to external dispute resolution processes.

About PrivateInvest

PrivateInvest is an investment fund manager in non-bank lending with an impressive pedigree in funds management for wholesale and sophisticated investors.

Wholesale and sophisticated investors rely on PrivateInvest to deliver above average risk adjusted returns in the commercial real estate debt market through equity, mezzanine debt, preferred equity, and hybrid debt instruments.

PrivateInvest investment opportunities are open to sophisticated and wholesale investors only.

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