We believe there are amendments that could be made to the current wholesale and sophisticated investor client tests, particularly the thresholds for each of the tests, which have not been amended since first being implemented over two decades ago.

Our recommendations are summarised as follows:

• Remove the requirements for the provision of accountants’ certificates
• Increase the product value test to $1 million and index in line with AWOTE in $100,000 increments
• Increase the net assets test of the individual wealth test to $4 million and index in line with AWOTE in $250,000 increments
• Exclude an individual’s principal place of residence from the net assets test
• Increase the gross income test threshold to $350,000 and index in line with AWOTE in $25,000 increments.
• The gross income financial threshold should exclude capital gains, employment termination payments and franking credits.
• Introduce the requirement for individual consent to be treated as a wholesale investor or client.