Executive Director for Policy and Advocacy of the Financial Services Council (FSC), Spiro Premetis, has expressed his support for raising the wholesale investor test thresholds.
While the case has not been made for an overhaul of the managed investment scheme framework, FSC acting Chief Executive, Premetis states that an increase in test thresholds will assist with ensuring that investments can be managed accordingly.
“An increase to the wholesale investor test threshold to $5 million, including the family home, will help ensure wholesale products can only be accessed by those who are able to bear the financial risk…” Premetis said.
According to the Australian Financial Review, Labor is set to make it more challenging for regular investors to qualify as “sophisticated investors,” with regulators warning that access to riskier assets like private equity and unlisted property should be restricted to individuals with more than $4.5 million.
“Investors [able to bear the financial risk] are more likely to have a more sophisticated understanding of financial matters, and who can afford to seek financial advice on the investments,” Premetis added.
Labor’s reform will also include a mechanism to guarantee that test thresholds raise on a regular basis to account for price fluctuations, such as a periodic ministerial review.
Source: Australian Financial Review
